A working partner gets a commission of 20% of the profit for being the active partner. The commission is worked out after Rs 3,000 of the profit is donated to a trust, and he receives Rs 8,000 as his commission. Find the total profit of the business.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Rs 43,000
The donation is taken out first, and the 20% commission is worked out on the profit that is left. So the commission gives the remaining profit, and the donation is then added back.
20% of (profit left after the donation) \(=\) Rs 8,000
Profit left after the donation \(\displaystyle =\frac{8000\times100}{20}=\) Rs 40,000
Total profit \(=40000+3000=\) Rs 43,000
The total profit is Rs 43,000.
Why the other options are incorrect
Option (1) Rs 47,000 — Incorrect. The Rs 44,000 left after the donation would give a commission of Rs 8,800, not Rs 8,000.
Option (2) Rs 40,000 — Incorrect. This is only the profit after the donation; the Rs 3,000 given to the trust has not been added back.
Option (3) Rs 48,000 — Incorrect. The Rs 45,000 left after the donation would give a commission of Rs 9,000.