Three individuals form a partnership and agree to divide the profits equally. X invest $4,500, Y invests $4,500, and Z invests $1,000. If the profits are $1,500, how much does X receive than if the profits were divided in proportion to the amount invested?

X receives $175 less when the profits are split equally than if they were divided in proportion to the amount invested.

Explanation:

Since each of the 3 participants are sharing the profits equally, they each receive one-third of $1500 - so, they each get $1500/3 = $500

If the profits were divided in proportion to the amount invested, you can find the amount that X would get by taking the fraction he donated (this fraction is equal to the amount he donated divided by the total amount donated:

($4500)/($4500+$4500+$1000) = 4500/10000 = 9/20.

Since X donated 9/20 of the total, he would get 9/20 of the profits, which would be 9/20*1500 =$675.

The difference between $675 and $500 is $175.

Apr 29th, 2015

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