Free Study Material For RRB Examination: Mathematics (Partnership)
Free Study Material For RRB Examination
Subject : Mathematics (Partnership)
Partnership
When two or more than two persons run a business jointly,
they are called partners in the business and the deal between them is known as
partnership.
Partnership is of two types
1. Simple Partnership
2. Compound Partnership
1. Simple Partnership: When investments of all the partners
are for the same period of time, the profit or loss is distributed among the
partners in the ratio of their original investments.
Suppose A and B invest ` p and ` q respectively for a year in a business, then
at the end of the year. Share of A’s profit (loss) : Share of B’s profit (loss)
= p : q.
2. Compound Partnership: When investments of all the partners are for different period of time, then equivalent capitals are calculated for a unit of time and the profit or loss is divided in the ratio of the product of time and investment.
Suppose A and B invest ` p and ` q for x months and y months respectively, then Share of A’s profit (loss): Share of B’s profit (loss) = px : qy.
Partners are of two types
(i) Working Partner, and
(ii) Sleeping Partner
(i) Working Partner: A partner who manages the business is called a working
partner.
(ii) Sleeping Partner: A partner who only invests the money is called a sleeping
partner.
Example 1: A and B started a business with capitals of
25000 and
40000 respectively. Find the share of A and B out of an annual profit of
6500.
Solution. Ratio of shares of A and B = Ratio of their investments = 25000 : 40000 = 5 : 8
