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Ram started off a business with a very small capital. The first year he earned a profit of 50% but spent 50% of the total for the sake of business. The same was repeated in the 2nd and the 3rd year, and at the end of third year he was left with an amount of Rs.16875. what was he left with at the end of the 2nd year?

A.	16875	B.	22500
C.	30000	D.	40000

Answer and Explanation

Answer:22500

Explanation:
Let the initial capital be 800x
Hence, in the 1st year the profit was 400x (50% of capital) and the total is 1200x of which 50% is spent. Hence, the remaining (600x) is the capital for the 2nd year.
Similarly, in the 2nd year the profit is (50% of 600x) which is 300x and 50% of the total (50% of (600x + 300x)) i.e. 450x is spent and the remaining 450x is the capital for 3rd year. The profit for the 3rd year is 50% of 450x i.e. 225x and 50% of the total (50% of (450x + 225x)) i.e. 337.5x is spent and the remaining 337.5x is equal to Rs.16875.
Therefore, x = 16875/337.5 = 50
At the end of 2nd year he was left with 450x = 450 * 50 = Rs.22500

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