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Old ratio is 7:1:2. C retires and A B new ratio is 3:1. What is the gaining ratio?

Answer and explanation

Correct answer: 1:3

The direct answer is A, 1:3. The old ratio 7:1:2 has total 10, so A’s old share is 7/10 and B’s old share is 1/10. After C retires, A:B become 3:1, so A’s new share is 3/4 and B’s new share is 1/4. A’s gain is 3/4 − 7/10 = 15/20 − 14/20 = 1/20. B’s gain is 1/4 − 1/10 = 5/20 − 2/20 = 3/20. Comparing the gains gives 1/20:3/20 = 1:3. Option A is correct. B is the new ratio, not the gaining ratio. C is the old A:B ratio and ignores the changed shares. D is wrong because the gains are unequal. Memory cue: never use the new ratio directly; subtract old shares first.

Related tags

GoodwillGaining-RatioExpert-Numerical

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