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My brother is driving a limo with his partner who told him that they will go 50-50 on income and also 50-50 on gas.

So if my brother earns \$1000 by spending \$200 on gas, what will be my brothers share and what will be his partners share?

So you have to calculate what my brother should get from the \$1000 and what his partner should get taking into consideration the spending on gas (is spent by my brother).

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@Khromonkey's solution is correct. Maybe an easier way to see it is that the business should reimburse your brother the \$200 for gas and split the rest. The result is the same-your brother gets paid \$600. –  Ross Millikan Dec 30 '12 at 3:53
    
My brother gave his answer below. He is still not believing I am correct. Lol thanks for support. I am trying hard to save his 100 bucks. –  Aman Dec 30 '12 at 4:33
    
Plz tell me if the second answer is right or the first one. –  Aman Dec 30 '12 at 6:27
    
I see three answers, and they all agree. What do you see different? My comment agrees with them as well. –  Ross Millikan Dec 30 '12 at 16:31
    
Thanks to all, job done. I already knew how to calculate this simple math. But I had to prove that my brother was miscalculating. He agreed. Internet is the best invention, you have so many people who are there to help out. Thanks everybody. –  Aman Dec 30 '12 at 22:22
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3 Answers 3

up vote 5 down vote accepted

OK, so your brother and partner spend 200 on total and get 1000 back. This means your brother should pay 100 of the 200 and get 500 of the 1000 back. This way he gets 400 profit. Since However: taking into account that your brother paid the full 200 he should get 600 of the 1000 and give 400 to the partner. This way both of them make a profit of 400.

Tutorial

There are two possible scenarios: I don’t understand which one applies to you.

Scenario 1.

Your brother paid for the full amount of gas: In this scenario the partner needs to give him 600 bucks to compensate for the 200 he spent on the gas. This way they both get 400 profit.

Scenario 2.

Your brother and his partner both paid 100 dollars to buy the gas. In this case they should both take 500 out of the 1000 to get 400 profit.

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thanks but I am not able to explain that to my brother, he thinks he is a economics genius. lol he kept fighting all night. If someone thinks it is wrong plz do share. If the answer is correct plz say yes so that I can prove to my brother. –  Aman Dec 30 '12 at 2:30
    
what does he say is the answer? @Aman –  Bananarama Dec 30 '12 at 2:32
    
he say like first we deduct 200 from 1000 to calculate profit. So we are left with 800. Which is divided 400 and 400. But he thinks that out of the expense he will keep 100 and give 100 to his friend. So they end up with 500 each. But I am telling him that he should keep all the money for gas as he paid for it. Am I correct or not. –  Aman Dec 30 '12 at 2:51
    
Ok let me get this straight: your brother paid for the full amount of gas. Therefore he had -200. Then they got the 1000 dollars. So they made 800 profit in total. This means they shoul each have 400 at the end. add 600 to -200 to get 400 and give the 400 to the partner for both of them to have 400 profit. –  Bananarama Dec 30 '12 at 2:55
    
Lol that is what I am telling him. He thinks he has to apply economics when it is plain maths. He is double counting expenses. He is still fighting. –  Aman Dec 30 '12 at 3:19
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Both you and your brother calculations are correct. You remove the expenses and split the profit:

Revenue - Expenses = Profit 
share = Profit/2 

1000 - 200 = 800 
800 / 2 = 400
Both should get $400 of **profit**.

He splits the revenue and the expenses:

(Revenu/2) - (expenses/2) = share
(1000/2) - (200/2) = 500 - 100 = 400
Both should get $400 of **profit**.

As far as the computation goes, the result is the same. They both get \$500 of the revenue except for the fact that the revenue money doesn't exist if your brother collected the money and paid the expenses. Once you have paid the expenses, what is left is profit, not revenue.

The problem here is that we don't know who got the $1000. We know your brother paid \$200, but we don't know who collected the \$1000.

If your bother collected the money and paid the expenses, what is left is profit: he owes \$400 to his partner. If he likes, he can give \$500 to his partner and take \$100 back. No difference.

If his partner collected the money but did not pay the expenses, what he has is revenue, he owes your brother \$600. His partner can also give him \$500 for his share of the revenue, and \$100 for his share of the expenses.

Worth mentioning that whoever owns the car is the sucker in this deal, because the real cost of the car is quite a bit in excess of the gas in the tank. There are insurance fees, maintenance, repairs, depreciation, risk, etc. which all add up to the actual cost of driving the car. Roughly, if you spend \$200 on gas, there is about \$100 in hidden costs.

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But he is not working. The car is working. So the car has to pay for itself. Like we pay for our self. This guy is just getting all the money for just putting his car on the road. He is not worried that he will get hurt in accident. He is just sleeping at home and earning all the money. –  Aman Dec 30 '12 at 8:23
    
The car owner is getting the check ie that he has all the money. So all I am telling him that you should get 600 out of 1000 as he is paying for all the gas. But he is telling me, he should only get 500 and not 600 from the total 1000 they have earned. –  Aman Dec 30 '12 at 8:29
    
i think it should be this simple first divide the earning ie 500 and 500. Now simply split the total gas cost paid 100 and 100. So now as my brother has already paid 200, but his share of spending is 100, so he should take that from the earning share of his partner. And the end result will be 600 to my bro and 400 to his partner out of 1000. So simple! –  Aman Dec 30 '12 at 8:33
    
@Aman You are correct, if the partner is the one who collects the money, your brother should get $600 based on your agreement. –  Sylverdrag Dec 30 '12 at 13:06
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Okay, I'm the brother LOL.

Let me do the economics of the total

Revenue = \$1000 = \$800 + \$200

Profit = \$800

Spending = \$200

Now 50% profit and 50% spending

Profit = \$400

I should be paying only \$100 for the gas But I spent the full share of the gas

So now I should ask my partner to pay that extra \$100 I spent on gas

Let's look at the share now

My share: profit = \$400 and spending = \$100

His share: profit = \$400 and spending = \$100

Now the revenue for both is \$500 with equal share of profit and spending.

I think its pretty clear from my ecnomics calculations.


Edit: I forgot to mention. We are also splitting the expenses. I think that was the missing piece.

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You'll have to put a backslash before each dollar sign, like this: \$. This is because the dollar sign on its own is used for MathJax on this site - see here. –  Zev Chonoles Dec 30 '12 at 4:16
    
Sorry, its my first time using this website and I'm writing from a phone. :( –  bik Dec 30 '12 at 4:20
    
No worries, you can get a lot of useful information on this page‌​. –  Zev Chonoles Dec 30 '12 at 4:22
    
@bik Welcome to MSE. –  Alexander Gruber Dec 30 '12 at 4:36
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