Hi there. I'm having difficulty finding the right method to split up an inheritance. Unfortunately, it involves a long post (apologies for that), but I believe it's basically a simple math problem at heart. OK, here goes: I recently sold an inherited piece of property and want to split the proceeds among 4 siblings (including myself). Before the property was sold, two of the siblings had contributed to repairs and would like to recover that money. In trying to figure out how to correctly split up the proceeds, I come up with two possible methods - both of them seem legitimate, but they lead to completely different answers! I'm hoping someone with better math skills than me could let me know which is the correct method to use.
Here is the background information:
- The total proceeds from the property sale were $5000
- The split arrangement is 28.33% for siblings 1, 2, & 3, and 15% for sibling 4 ([28.33% x 3] + 15% = 100%)
- Sibling 1 wants to recover $1000 spent on repairs
- Sibling 2 wants to recover $500 spent on repairs
Split Method 1:
1. Subtract the $1K and $500 needed to repay siblings 1 & 2 from the $5K total ($5K - $1.5K = $3.5K)
2. Split the remaining $3.5K up between the siblings (next two steps)
3. Sibs 1, 2, & 3 receive 28.33% of 3.5K = $992 each (rounding up)
4. Sib 4 receives 15% of 3.5K = $525
5. Sib 1 recovers his $1K by adding it to $992 and receives $1992
6. Sib 2 recovers her $500 by adding it to $992 and receives $1492
7. Sibs 3 and 4 amounts don't change
8. Totals for sibs 1 + 2 + 3 + 4 = $1992 + $1492 + $992 + $525 (= $5K)
Split Method 2:
1. Split the $5K up between the sibs (next two steps)
2. Sibs 1, 2, and 3 receive 28.33% of $5K = $1417 each (rounding up)
3. Sib 4 receives 15% of $5K = $750
4. Sib 1 recovers his $1K by adding it to $1417 and receives $2417
5. Sibs 2, 3, & 4 each have 1/3 of this $1K subtracted from their totals, so $1417 - $333 = $1084 (sibs 2, 3) and $750 - $333 = $417 (sib 4)
6. Sib 2 recovers her $500 by adding it to $1084 and receives $1584
7. Sibs 1, 3, & 4 each have 1/3 of this $500 subtracted from their totals, so $2417 - $167 = $2250 (sib 1), $1084 - $167 = $917 (sib 3), and $417 - $167 = $250 (sib 4)
8. Totals for sibs 1 + 2 + 3 + 4 = $2250 + $1584 + $917 + $250 (= $5K)
As you can see, in both methods, the totals correctly add up to $5K, but the amount each sibling receives is different! Which of these is the correct method (assuming both aren't wrong)? Thanks very much for helping me solve this problem!
Here is the background information:
- The total proceeds from the property sale were $5000
- The split arrangement is 28.33% for siblings 1, 2, & 3, and 15% for sibling 4 ([28.33% x 3] + 15% = 100%)
- Sibling 1 wants to recover $1000 spent on repairs
- Sibling 2 wants to recover $500 spent on repairs
Split Method 1:
1. Subtract the $1K and $500 needed to repay siblings 1 & 2 from the $5K total ($5K - $1.5K = $3.5K)
2. Split the remaining $3.5K up between the siblings (next two steps)
3. Sibs 1, 2, & 3 receive 28.33% of 3.5K = $992 each (rounding up)
4. Sib 4 receives 15% of 3.5K = $525
5. Sib 1 recovers his $1K by adding it to $992 and receives $1992
6. Sib 2 recovers her $500 by adding it to $992 and receives $1492
7. Sibs 3 and 4 amounts don't change
8. Totals for sibs 1 + 2 + 3 + 4 = $1992 + $1492 + $992 + $525 (= $5K)
Split Method 2:
1. Split the $5K up between the sibs (next two steps)
2. Sibs 1, 2, and 3 receive 28.33% of $5K = $1417 each (rounding up)
3. Sib 4 receives 15% of $5K = $750
4. Sib 1 recovers his $1K by adding it to $1417 and receives $2417
5. Sibs 2, 3, & 4 each have 1/3 of this $1K subtracted from their totals, so $1417 - $333 = $1084 (sibs 2, 3) and $750 - $333 = $417 (sib 4)
6. Sib 2 recovers her $500 by adding it to $1084 and receives $1584
7. Sibs 1, 3, & 4 each have 1/3 of this $500 subtracted from their totals, so $2417 - $167 = $2250 (sib 1), $1084 - $167 = $917 (sib 3), and $417 - $167 = $250 (sib 4)
8. Totals for sibs 1 + 2 + 3 + 4 = $2250 + $1584 + $917 + $250 (= $5K)
As you can see, in both methods, the totals correctly add up to $5K, but the amount each sibling receives is different! Which of these is the correct method (assuming both aren't wrong)? Thanks very much for helping me solve this problem!