SOLUTION: mark invested $12, 000 in a new restaraunt. When the restaurant was sold two years later, he received $ 27,000. Find his average annual return by soloving the equation 12,000( 1 +

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: mark invested $12, 000 in a new restaraunt. When the restaurant was sold two years later, he received $ 27,000. Find his average annual return by soloving the equation 12,000( 1 +      Log On

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Question 199788: mark invested $12, 000 in a new restaraunt. When the restaurant was sold two years later, he received $ 27,000. Find his average annual return by soloving 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
12,000+24,000r+12,000r^2-27,000=0
12,000r^2+24,000r-15,000=0
(6,000r-3,000)(2,000r+5,000)=0
6,000-3,000=0
r=3,000/6,000
r=.5 or 50% is the average annual return on investment.