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The new ratio is (2:2:1). What is the new partner's share if he is the third partner?

Answer and explanation

Correct answer: (1/5)

A ratio shows the relative shares of the partners. To convert a ratio into an actual fraction, add all its parts and place the relevant partner’s part over that total. The new ratio is 2:2:1, so the total number of parts is 2 + 2 + 1 = 5. Since the new partner is the third partner, the third partner has one of these five parts. Therefore, the new partner’s share is 1/5, making option A correct.

The first and second partners each have 2/5, while the third partner has 1/5. These fractions add to 2/5 + 2/5 + 1/5 = 1, or the whole profit. The third position is important: if the new partner were in a different position, the answer would change. Thus 2/5, 1/2, and 1/3 do not represent the third partner’s share in this ratio.

Related tags

New RatioNew Partner ShareGoodwill Base

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