Question

Four individuals form a business and create a contract to divide the profits equally among the four. Gary invests $11,000, Neil invests $4,000, Jill invests $5,000, and Steve invests $8,000. The profits at the end of the year are $5,600. How much less does Gary receive than if the profits were divided in relation to the amount invested by each owner?

Answer 1

$800

Step-by-step explanation:

First, we need to determine what is the ratio of Gary's initial investment to the total invested amount:

`G=(11,000)/(11,000 + 4,000 +5,000 +8,000) \\G = 0.3928`

The contract states that Gary should get one fourth of the $5,600 profits. If profits were divided in relation to the amount invested, Gary would receive 0.3928 multiplied by total profits. Therefore, the difference (D) is:

`D=(0.3928*5,600) - (5,600)/(4) \\D= 800`

Gary receives $800 fewer.