SOLUTION: 104) Venture captial. Henry invested $12,000 in a new restaurant. When the restaurant was sold two years later, be received $27,000. Find his average annual return by solving the e

Algebra ->  Test  -> Lessons -> SOLUTION: 104) Venture captial. Henry invested $12,000 in a new restaurant. When the restaurant was sold two years later, be received $27,000. Find his average annual return by solving the e      Log On


   

Question 162785This question is from textbook Elementary and Intermediate
: 104) Venture captial. Henry invested $12,000 in a new restaurant. When the restaurant was sold two years later, be received $27,000. Find his average annual return by solving the equation 12,000(1+r)^2 = 27,000 This question is from textbook Elementary and Intermediate

Answer by checkley77(12844) About Me  (Show Source):
You can put this solution on YOUR website!
12,000(1+r)^2 = 27,000
12,000(1+2R+R^2)=27,000
12,000+24,000R+12,000R^2=27,000
12,000R^2+24,000R+12,000-27,000=0
12,000R^2+24,000R-15,000=0
3,000(4R^2+8R-5)=0
3,000(2R-1)(2R+5)=0
2R-1=0
2R=1
R=1/2 OR .5 OR 50% ANNUAL RETURN.
PROOF:
12,000(1+.5)^2=27,000
12,000(1.5)^2=27,000
12,000*2.25=27,000
27,000=27,000