Final answer:
The overall rate of return on a $150,000 investment, which has different rates for different portions, is 22% after calculating the weighted average of the returns.
Step-by-step explanation:
To determine the overall rate of return on a $150,000 investment with different rates for different portions, we need to calculate the weighted average of the returns from each portion. First, calculate the return on the $50,000 investment at 8%, and then the return on the remaining $100,000 at 29%. The formula for the overall rate of return (R) is given by:
R = (investment1 * rate1 + investment2 * rate2) / total investment
By plugging in the values, we can find the overall return:
R = (50,000 * 0.08 + 100,000 * 0.29) / 150,000
Calculating the above, we get:
R = (4,000 + 29,000) / 150,000 = 33,000 / 150,000 = 0.22 or 22%
Therefore, the overall rate of return on this $150,000 investment is 22%.