SOLUTION: I have a question that I am having trouble with.
It is about venture capital. A man invested 12,000 in a new restaurant when the restaurant was sold 2 yearS later he received 27,
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Question 190795: I have a question that I am having trouble with.
It is about venture capital. A man invested 12,000 in a new restaurant when the restaurant was sold 2 yearS later he received 27,000. I am to find the average annual return by solving the equation 12,000(i+r)^2=27,000
I have subtracted 12000 from each side giving me r^2=15000. This does not seems right. Am I on the right track? Can you please help?
Answer by solver91311(24713) (Show Source): You can put this solution on YOUR website!
First let's make sure that you have the correct formula. You typed:
^2=27,000)
Whereas the correct formula for this problem is:
^2=27,000)
Either way, subtracting 12,000 from both sides is incorrect. You need to divide both sides by 12,000, thus:
^2=\frac{27,000}{12,000})
Then reduce the fraction:
^2=\frac{27}{12}=\frac{9}{4})
Now take the square root of both sides:
Finally add -1 to both sides:
A mighty fine investment indeed.
John
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