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Profit on Investment

Date: 4/16/96 at 9:0:13
From: Anonymous
Subject: Re: Profit on Investment

Ann, Bill, Cynthia, and Don respectively invest $2000,
$3000, $8000, and $7000 in a joint business venture, 
agreeing to share the profits in the ratio of their
investments. How much does each receive if the 
business earns a profit of $38000?

Thank you,

Date: 4/17/96 at 11:46:31
From: Doctor Jodi

It's only fair that the person who invests the most money receive the  
largest share of the profits.  Let me give you an example so that I 
won't spoil this problem for you.  

Suppose I invest $2 and a friend invests $3 in a lemonade stand.  We 
earn a profit of $8.  How much does each of us get?

Well, of the total investment ($5), I invested $2, or 2/5.  My friend 
invested $3, or 3/5.  So if we are sharing profits in proportion to 
the investments we made, then I get 2/5 of $8 (or 16/5, when you 
multiply, which is to say $3.20), while my friend gets 3/5 of $8 
(24/5 or $4.80).

Does this make sense? Do you see how to apply this method to your 

Write us back if you need more help!

-Doctor Jodi,  The Math Forum
 Check out our web site!   
Associated Topics:
Middle School Fractions

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