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\left(x+1\right)^{2}=\left(x+2\right)\left(x-2\right)
Multiply x+1 and x+1 to get \left(x+1\right)^{2}.
x^{2}+2x+1=\left(x+2\right)\left(x-2\right)
Use binomial theorem \left(a+b\right)^{2}=a^{2}+2ab+b^{2} to expand \left(x+1\right)^{2}.
x^{2}+2x+1=x^{2}-4
Consider \left(x+2\right)\left(x-2\right). Multiplication can be transformed into difference of squares using the rule: \left(a-b\right)\left(a+b\right)=a^{2}-b^{2}. Square 2.
x^{2}+2x+1-x^{2}=-4
Subtract x^{2} from both sides.
2x+1=-4
Combine x^{2} and -x^{2} to get 0.
2x=-4-1
Subtract 1 from both sides.
2x=-5
Subtract 1 from -4 to get -5.
x=\frac{-5}{2}
Divide both sides by 2.
x=-\frac{5}{2}
Fraction \frac{-5}{2} can be rewritten as -\frac{5}{2} by extracting the negative sign.