Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 - ) A bank gives four types of loans to its individual customers. Personal loan types and annual interest rates are 1 4 %

1-) A bank gives four types of loans to its individual customers. Personal loan types and annual interest rates are 14% for a housing loan, 20% for a vehicle loan, 10% for a mortgage consumer loan, and 20% for a personal consumer loan. The bank's maximum lending capacity is 250 million currency units. The bank abides by the following policies must: The loan
amount to be allocated to the housing loan must be at least 55% of the total loan amount to be given to the housing and vehicle loans.
The loan amount to be allocated to the housing loan must be at least 25% of the total amount to be given to all loans.
The loan amount allocated for a vehicle loan should not exceed 25% of the total loan amount.
The average interest rate for all loans should not exceed 15%.
Set up a linear programming problem that will optimize the bank's total interest income under the given constraints. (Write by explaining the decision variables and constraints.)
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Capital As Power

Authors: Jonathan Nitzan, Shimshon Bichler

1st Edition

0415496802, 978-0415496803

More Books

Students also viewed these Finance questions

Question

explain the concept of strategy formulation

Answered: 1 week ago