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A credit union wants to make investments in the following: Type of Investment Annual rate of return(%) Vehicle

A credit union wants to make investments in the following:

Type of Investment               Annual rate of return(%)

Vehicle loans                                       7

Consumer loans                                 9

Other secured loans                          10

Signature loans                                   11

Risk-free securities                             8


The firm will have $2,500,000 available for investment during the coming year. The following restrictions apply: 

• Risk-free securities may not exceed 30% of the total funds, but must comprise at least 5% of the total. 

• Signature loans may not exceed 12% of the funds invested in all loans (vehicle, consumer, other secured loans, and signature loans). 

• Consumer loans plus other secured loans may not exceed the vehicle loans. 

• Other secured loans plus signature loans may not exceed the funds invested in riskfree securities. 

Please develop the LP formula

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