SOLUTION: Henry invested $12,000 in a new resturant When the restaurant was sold two years later, he recieved $27,000. Find his average annual return by solving the equation %12,000 (1 + r )

Question 221624: Henry invested $12,000 in a new resturant When the restaurant was sold two years later, he recieved $27,000. Find his average annual return by solving the equation %12,000 (1 + r )^2 = 27,000
Can someone help me understand how to solve this problem?
Answer by rfer(16322) (Show Source): You can put this solution on YOUR website!
12000 (1+r)^2=27000
(1+r)^2=27000/12000
(1+r)^2=2.25
1+r=1.5
r=.5 or 5% per yr
the total return first yr =12000*1.5=18000
total return second yr =18000*1.5=27000
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