A and B invest in a business in the ratio 3 : 2. If 5% of the total profit goes to charity and A's share is Rs. 855, the total profit is:

Appeared in: NHM MP Staff Nurse - 2015

Explanation

First, account for the 5% charity donation, which leaves 95% of the total profit for the partners.
The remaining 95% of the profit is distributed between A and B in the ratio of 3:2.
A's portion is 3/5 of this distributable profit. This is given as Rs. 855.
The equation becomes: (3/5) * (95% of Total Profit) = 855.
Solving for the Total Profit: Total Profit = 855 / (3/5 * 0.95) = 855 / 0.57 = Rs. 1500.

Option A: This result is obtained if the 5% charity deduction is ignored. If A's share (Rs. 855) is incorrectly assumed to be 3/5 of the total profit, the total profit would be calculated as 855 * (5/3) = Rs. 1425.
Option C: This value is a result of a calculation error. It does not correspond to any logical step in the problem's solution, likely stemming from incorrect application of percentages or ratios.
Option D: This value is also a result of a calculation error. It might arise from incorrectly adding the 5% charity amount or misinterpreting the ratios involved in the profit sharing.

Clinical Relevance

Nursing practice connection: This is primarily an exam-oriented knowledge point with limited direct bedside application, so retain Profit and Loss Sharing in a Partnership as background academic context rather than a clinical decision trigger.
This problem demonstrates the practical application of percentages and ratios in financial calculations, a fundamental skill in business and personal finance.
Understanding how to distribute funds after deductions is crucial for budgeting, investment analysis, and managing partnership accounts.
What if the charity amount was a fixed sum (e.g., Rs. 500) instead of a percentage? In that case, you would subtract the fixed amount from the total profit (P - 500) before calculating the partners' shares.

How to Approach the Question

First, identify all the given values: the investment ratio (3:2), the percentage for charity (5%), and A's final share (Rs. 855).
Let the unknown total profit be represented by a variable, such as 'P'.
Calculate the portion of the profit that is distributable to the partners after the charity deduction. This is 100% - 5% = 95% of P, or 0.95P.
Determine A's share of this distributable profit using the given ratio. A's share is 3 parts out of a total of 5 (3+2), so A gets (3/5) of the distributable profit.
Set up an equation: (3/5) * (0.95 * P) = 855.
Solve this algebraic equation for 'P' to find the total profit.

Concept Tested & Keywords

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