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# 3 A credit union wishes to determine how to allocate $ 1 . 3 million in funds in the upcoming fiscal year. The credit

#3
A credit union wishes to determine how to allocate $1.3 million in funds in the upcoming fiscal year.
The credit union makes four types of loans to its members. In addition, the credit union invests in
risk-free securities to stabilize income. The revenue-producing options and their respective annual
rates of return (RoR) are as follows.
State and federal laws, along with credit union policies, impose the following restrictions.
Risk-free securities may not exceed 15% of the total funds available for investment.
The amount placed into unsecured loans may not exceed 40% of the funds allocated toward
personal loans (secured and unsecured combined).
The sum of the amounts allocated to mortgage and secured loans may not exceed the amount
allocated to automobile loans.
The amount allocated to personal loans (secured and unsecured combined) may not exceed
the amount invested in risk-free securities.
Formulate a linear programming model to determine the allocation of funds that will maximize the
total return on investment for the credit union. Provide all constraints in standard form. You do
not need to solve the LP.
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