Question 133548
12000(1+R)^2=27000
(1+R)^2=27000/12000
(1+R)^2=2.25
1+2R+R^2=2.25
R^2+2R+1-2.25=0
R^2+2R-1.25=0
(R-.5)(R+2.5)=0
5-.5=0
R=.5 OR 50% IS THE ANNUAL RETURN.
PROOF:
12000(1+.5)^2=27000
12000(1.5)^2=27000
12000*2.25=27000
27000=27000