# Rules of Partnership Aptitude Formulas, Definitions, & Examples:

#### Overview:

 Topic Included: Formulas, Definitions & Exmaples. Main Topic: Quantitative Aptitude. Quantitative Aptitude Sub-topic: Ratio and Proportion Aptitude Notes & Questions. Questions for practice: 10 Questions & Answers with Solutions.

#### Rules of Partnership:

A partnership is an arrangement where partners, agree to cooperate to advance their mutual interests. The partners in a partnership may be individuals, businesses or organizations.

We will be going to discuss different cases related to the distribution of profit in partnership

#### Rules of Partnership Case (1):

When capital invested by the partners is different and the time period is constant, then profit of the partners will be divided according to capital invested by partners.

Example: If two partners x and y invested $$Rs.5000$$ and $$Rs.10,000$$ respectively, in a business for one year. Find the profit ratio of the partners?

Solution: profit ratio of partners x and y will be, $$5000 : 10000$$ $$1 : 2 \ (Answer)$$

#### Rules of Partnership Case (2):

When the time period is different and capital invested by the partners is same, then profit of the partners will be divided according to the time period invested by partners.

Example: If three partners x, y and z invested $$Rs.5000$$ each, in a business for one year, two years and four years respectively. Find the profit ratio of the partners?

Solution: profit ratio of partners x, y and z will be, $$T_1 : T_2 : T_3$$ $$1 : 2 : 4 \ (Answer)$$

#### Rules of Partnership Case (3):

When the time period and capital invested by the partners is different, then profit or loss of the partners will be divided according to following ratio.$$A_1 \ T_1 : A_2 \ T_2 : A_3 \ T_3........A_n \ T_n$$ Where $$A_1, \ A_2, \ A_3......A_n$$ are the capital or amount invested by the partners, and $$T_1, \ T_2, \ T_3.......T_n$$ are the time period of the investment.

Example: If two partners x and y invested $$Rs.10,000$$ and $$Rs.20,000$$ for one year and two years respectively, in a business. Find the profit ratio of the partners?

Solution: profit ratio of partners x and y will be, $$A_1 \ T_1 : A_2 \ T_2$$ $$10,000 \times 1 : 20,000 \times 2$$ $$10,000 : 40,000$$ $$1 : 4 \ (Answer)$$