# SOLUTION: Henry invested \$12,000 in a new restaurant. When the restaurant was sold 2 years later, he received \$27,000. Find his average annual returning by solving the equation 12,000(1+r)^2

Algebra ->  Algebra  -> Customizable Word Problem Solvers  -> Finance -> SOLUTION: Henry invested \$12,000 in a new restaurant. When the restaurant was sold 2 years later, he received \$27,000. Find his average annual returning by solving the equation 12,000(1+r)^2      Log On

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 Question 194251: Henry invested \$12,000 in a new restaurant. When the restaurant was sold 2 years later, he received \$27,000. Find his average annual returning by solving the equation 12,000(1+r)^2=27,000.Answer by checkley77(12569)   (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=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+5)(2r-1)=0 2r-1=0 2r=1 r=1/2 r=.5 or 50% is the average 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