Three individuals form a partnership and agree to divide the profits equally. X invests $4,500, Y invests $3,500 and Z invests $2,000. If the profits are $1,500, how much less does X receive than if the profits were divided in proportion to the amount invested?
Divided equally, X,Y,Z get 500 each
Divided proportionally, X gets
4500/10000 = 45% of 1500
So, subtract 500 from that to get the difference.
To find out how much less X receives compared to the profits divided in proportion to the amount invested, we first need to calculate the proportionate share of each partner based on their investment.
Step 1: Calculate the total investment.
Total investment = investment of X + investment of Y + investment of Z
Total investment = $4,500 + $3,500 + $2,000
Total investment = $10,000
Step 2: Calculate the proportionate share of each partner.
Proportionate share of X = (investment of X / total investment) * total profits
Proportionate share of X = ($4,500 / $10,000) * $1,500
Proportionate share of Y = (investment of Y / total investment) * total profits
Proportionate share of Y = ($3,500 / $10,000) * $1,500
Proportionate share of Z = (investment of Z / total investment) * total profits
Proportionate share of Z = ($2,000 / $10,000) * $1,500
Step 3: Calculate the difference in X's share.
Difference = Equal share - Proportionate share of X
Now let's calculate the individual values:
Proportionate share of X = ($4,500 / $10,000) * $1,500
Proportionate share of X = $675
Equal share for each partner = Total profits / Number of partners
Equal share = $1,500 / 3
Equal share = $500
Difference = $500 - $675
Difference = -$175
X receives $175 less compared to the profits divided in proportion to the amount invested.