Kiran and Varun share profits in the ratio 7:3. Naman is admitted as a partner for a 1/5 share of the profits. If the remaining profit is shared between the old partners in their old ratio, what will be Varun’s new share of profit?

Correct answer: \(\frac{6}{25}\)

Naman receives \(\frac{1}{5}\), so the profit left for the old partners is \(1-\frac{1}{5}=\frac{4}{5}\). Varun’s old share was \(\frac{3}{10}\); therefore, his new share is \(\frac{4}{5}\times\frac{3}{10}=\frac{6}{25}\). Option C represents Kiran’s new share, while option D is Naman’s share. Exam tip: multiply an old partner’s old fraction by the fraction of profit remaining for the old partners.