SOLUTION: Henry invested $12,000 in new resturant. When hte resutrant was sold two years later, he received $27000. Find his average annual return by solving the equation 12,000(1+r)^(2)=

Question 393971: Henry invested $12,000 in new resturant. When hte resutrant was sold two years later, he received $27000. Find his average annual return by solving the equation 12,000(1+r)^(2)= 27000
Answer by pie90010(44) (Show Source): You can put this solution on YOUR website!
12,000(1+r)^(2)= 27000
so it's just an equation, solve it like one
start by dividing both sides by 12,000
(1+r)^2 = 2.25
Now get rid of that ugly square , the opposite of squaring a number, is square root, so root both sides
1 + r = 1.5
r = .5
so the multiplier would be 1.5 , which means he gained 50% a year
Hope i helped

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