Your Questions About Investing In Restaurants Return

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James asks…

Find his average annual return by solving the equation 12,000(1+r)^2=27,000″?

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

financi4 answers:

12000(1 + r)² = 27000
(1 + r)² = 27000/12000
(1 + r)² = 9/4
(1 + r) = 3/2
r = 3/2 – 1 = 1/2 = 0.50 = 50%

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