5. A and B are partners sharing profits and losses in the ratio of 3:2 (A's Capital is 30,000 and B's Capital is 15,000). They admitted C and agreed to give 1/5th share of profits to him. How much C should bring in towards his capital?
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Given:
To find: The value of capital that C needs to bring in.
Answer:
Let the total profit be considered as 1.
Remaining profit for A and B excluding C = 1 - 1/5 = 4/5
Total capital of the old firm = A's capital + B's capital
Total capital of the old firm = Rs 30,000 + Rs 15,000
Total capital of the old firm = Rs 45,000
For 4/5th shares, the capital is Rs 45,000.
Total capital of the new firm = Total capital of the old firm × Reciprocal of the old firm
Total capital of the new firm = Rs 45,000 × 5/4
Total capital of the new firm = Rs 56,250
C's capital = Rs 56,250 - Rs 45,000
C's capital = Rs 11,250
Therefore, C needs to bring in Rs 11,250 as his capital.