Question

Julie, Annabelle and max invested in a partenership in the ratio of 4:5:7, respectively. Years later, when the partenership is worth $4.5 billion, Julie decides to invest in another business and sells her share of the partenership where Annabelle and max each buy out half of her partenership. what percent of the business will max own after the buy out?

Answer 1

When the business was worth $4.5 billion

Julie's share worth

= 4/(4 + 5 + 7) * $4.5 b

= 4/16 * $4.5b

= $1.125 billion

Annabelle share worth

= 5/16 * $4.5b

= $1.40625 billion

If Annabelle buys 50% of the worthof Julie's, her total share worth

= 50% * $1.125 billion + $1.40625 billion

= $1.96875 billion

This is equivalent in percentage as

= $1.96875 billion/$4.5 billion * 100%

= 43.75%

Since the business is now owned by Max and Annabelle, Max share worth

= 100% - 43.75%

= 56.25%