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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?

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Answer:

$800

Explanation:

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

[tex]G=\frac{11,000}{11,000 + 4,000 +5,000 +8,000} \\G = 0.3928[/tex]

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:

[tex]D=(0.3928*5,600) - \frac{5,600}{4} \\D= 800[/tex]

Gary receives $800 fewer.

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