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

Algebra ->  Polynomials-and-rational-expressions -> SOLUTION: Henry invested $12,000 in a new restaurant. When the restaurant was sold two years later, he received $27,000. Find his average annual return by solving the equation 12,000(1+r)^2=      Log On


   

Question 161291: Henry invested $12,000 in a new restaurant. When the restaurant was sold two years later, he received $27,000. Find his average annual return by solving the equation 12,000(1+r)^2= 27,000.
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
r^2+2r+1=27,000/12,000
r^2+2r+1=2.25
r^2+2r+1-2.25=0
r^2+2r-1.25=0
(x+2.50(x-.5)=0
x-.5=0
x=.5 or 50% annual return of investment.
Proof:
12,000(1+.5)^2=27,000
12,000(1.5^2)=27,000
27,000=27,000