Calculating Average Monthly Investment

Oct 13, 2025 by wbrum.org 138 views

Vujani and Irene's Business Partnership: Calculating Profit Sharing

In business partnerships, profit sharing is often determined by the amount of investment each partner contributes. In this scenario, Vujani and Irene are business partners who have invested different amounts over varying periods. To calculate their profit sharing, we need to determine the average monthly investment of each partner.

Calculating Average Monthly Investment

To calculate the average monthly investment, we need to divide the total investment by the number of months.

Vujani's Investment

Vujani has contributed a total of R4000 over 8 months. To calculate the average monthly investment, we divide the total investment by the number of months:

Average monthly investment = Total investment / Number of months
= R4000 / 8
= R500 per month

Irene's Investment

Irene has contributed a total of R10000 over 5 months. To calculate the average monthly investment, we divide the total investment by the number of months:

Average monthly investment = Total investment / Number of months
= R10000 / 5
= R2000 per month

Calculating Profit Sharing

Now that we have calculated the average monthly investment of each partner, we can determine their profit sharing. The profit will be shared in proportion to their average monthly investment.

Profit Sharing Ratio

To calculate the profit sharing ratio, we divide the average monthly investment of each partner by the total average monthly investment.

Total average monthly investment = Vujani's average monthly investment + Irene's average monthly investment
= R500 + R2000
= R2500

Profit sharing ratio = Vujani's average monthly investment / Total average monthly investment
= R500 / R2500
= 1/5 or 20%

Profit sharing ratio = Irene's average monthly investment / Total average monthly investment
= R2000 / R2500
= 4/5 or 80%

In conclusion, Vujani and Irene's profit sharing ratio is 20:80, with Vujani receiving 20% of the profit and Irene receiving 80%. This is based on their average monthly investment, which is R500 and R2000, respectively.

To calculate profit sharing, we need to determine the average monthly investment of each partner.
The profit sharing ratio is calculated by dividing the average monthly investment of each partner by the total average monthly investment.
In this scenario, Vujani and Irene's profit sharing ratio is 20:80, with Vujani receiving 20% of the profit and Irene receiving 80%.

This scenario can be applied to real-world business partnerships where profit sharing is determined by the amount of investment each partner contributes. By calculating the average monthly investment, businesses can determine the profit sharing ratio and ensure that each partner is fairly compensated for their investment.

This scenario involves the following mathematical concepts:

Division: to calculate the average monthly investment
Ratio: to calculate the profit sharing ratio
Proportion: to determine the profit sharing ratio

In conclusion, Vujani and Irene's business partnership is a classic example of how profit sharing can be determined by the amount of investment each partner contributes. By calculating the average monthly investment and profit sharing ratio, businesses can ensure that each partner is fairly compensated for their investment.
Vujani and Irene's Business Partnership: Q&A

In our previous article, we discussed how to calculate profit sharing in a business partnership using the average monthly investment of each partner. In this article, we will answer some frequently asked questions related to Vujani and Irene's business partnership.

Q: What is the total investment made by Vujani and Irene?

A: Vujani has contributed a total of R4000 over 8 months, while Irene has contributed a total of R10000 over 5 months.

Q: How do you calculate the average monthly investment?

A: To calculate the average monthly investment, we divide the total investment by the number of months. For Vujani, the average monthly investment is R500 (R4000 / 8), while for Irene, it is R2000 (R10000 / 5).

Q: What is the profit sharing ratio between Vujani and Irene?

A: The profit sharing ratio is calculated by dividing the average monthly investment of each partner by the total average monthly investment. In this case, the profit sharing ratio is 20:80, with Vujani receiving 20% of the profit and Irene receiving 80%.

Q: How do you determine the profit sharing ratio?

A: To determine the profit sharing ratio, we divide the average monthly investment of each partner by the total average monthly investment. In this case, the total average monthly investment is R2500 (R500 + R2000), and the profit sharing ratio is 1/5 (Vujani) and 4/5 (Irene).

Q: What are the key takeaways from this scenario?

A: The key takeaways from this scenario are:

To calculate profit sharing, we need to determine the average monthly investment of each partner.
The profit sharing ratio is calculated by dividing the average monthly investment of each partner by the total average monthly investment.
In this scenario, Vujani and Irene's profit sharing ratio is 20:80, with Vujani receiving 20% of the profit and Irene receiving 80%.

Q: How can this scenario be applied to real-world business partnerships?

A: This scenario can be applied to real-world business partnerships where profit sharing is determined by the amount of investment each partner contributes. By calculating the average monthly investment, businesses can determine the profit sharing ratio and ensure that each partner is fairly compensated for their investment.

Q: What mathematical concepts are involved in this scenario?

A: The mathematical concepts involved in this scenario are:

Division: to calculate the average monthly investment
Ratio: to calculate the profit sharing ratio
Proportion: to determine the profit sharing ratio