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If the total amount invested by the two companies in 2009 was Rs.27 lakhs, while the amount invested by Company B was 50% of the amount invested by Company A, what was the total profit earned by the two companies together?

A Rs. 21.15 lakhs

B Rs. 20.70 lakhs

C Rs.18.70 lakhs

D Rs. 20.15 lakhs

E None of these

Solution

Correct Answer: Option B

Total income = Profit earned + Total investment in the year.

Profit earned = (Investment × Profit percentage) ÷ 100

Profit percentage of A in 2009 = 75%

Profit percentage of B in 2009 = 80%

Say IA and IB are investments by A and B respectively in 2009.

Given IA + IB = 27 lakhs

Also IB = 0.50 × IA

⇒ 1.5 × IA = 27 lakhs

⇒ IA = 18 lakhs and IB = 9 lakhs

∴ Profit earned by A in 2009 = (18 × 75)/100 = 13.5 lakhs

Profit earned by B in 2009 = (9 × 80)/100 = 7.2 lakhs

∴ Total profit earned by two companies in 2009 = 13.5 + 7.2 = 20.7 lakhs

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