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Adirondack Savings Bank ( ASB ) has $ 1 million in new funds that must be allocated to home loans, personal loans, and automobile loans.
Adirondack Savings Bank ASB has $ million in new funds that must be allocated to home loans, personal loans, and automobile loans. The annual rates of return for the three types of loans are for home loans, for personal loans, and for automobile loans. The banks planning committee has decided that at least of the new funds must be allocated to home loans. In addition, the planning committee has specified that the amount allocated to personal loans cannot exceed of the amount allocated to automobile loans. a Formulate a linear programming model that can be used to determine the amount of funds ASB should allocate to each type of loan to maximize the total annual return for the new funds. If the constant is it must be entered in the box. If your answer is zero, enter Let H amount allocated to home loans P amount allocated to personal loans A amount allocated to automobile loans Max H P A st H P A Minimum Home Loans H P A Personal Loan Requirement H P A Amount of New Funds b How much should be allocated to each type of loan? Loan type Allocation Home $ Personal $ Automobile $ What is the total annual return? If required, round your answer to nearest whole dollar amount. $ What is the annual percentage return? If required, round your answer to two decimal places. c If the interest rate on home loans increases to would the amount allocated to each type of loan change? Select your answer Explain. An increase to Select your answer within the allowable range, so the amount allocated to each type of loan Select your answer change. d Suppose the total amount of new funds available is increased by $ What effect would this have on the total annual return? Explain. If required, round your answer to nearest whole dollar amount. An increase of $ to the total amount of funds available would increase the total annual return by $ e Assume that ASB has the original $ million in new funds available and that the planning committee has agreed to relax the requirement that at least of the new funds must be allocated to home loans by How much would the annual return change? If required, round your answer to nearest whole dollar amount. $ How much would the annual percentage return change? If required, round your answer to two decimal places.
Adirondack Savings Bank ASB has $ million in new funds that must be allocated to home loans, personal loans, and automobile loans. The annual rates of return for the three types of loans are for home loans, for personal loans, and for automobile loans. The banks planning committee has decided that at least of the new funds must be allocated to home loans. In addition, the planning committee has specified that the amount allocated to personal loans cannot exceed of the amount allocated to automobile loans.
a Formulate a linear programming model that can be used to determine the amount of funds ASB should allocate to each type of loan to maximize the total annual return for the new funds. If the constant is it must be entered in the box. If your answer is zero, enter
Let H amount allocated to home loans
P amount allocated to personal loans
A amount allocated to automobile loans
Max
H
P
A
st
H
P
A
Minimum Home Loans
H
P
A
Personal Loan Requirement
H
P
A
Amount of New Funds
b How much should be allocated to each type of loan?
Loan type Allocation
Home $
Personal $
Automobile $
What is the total annual return?
If required, round your answer to nearest whole dollar amount.
$
What is the annual percentage return?
If required, round your answer to two decimal places.
c If the interest rate on home loans increases to would the amount allocated to each type of loan change?
Select your answer
Explain.
An increase to
Select your answer
within the allowable range, so the amount allocated to each type of loan
Select your answer
change.
d Suppose the total amount of new funds available is increased by $ What effect would this have on the total annual return? Explain.
If required, round your answer to nearest whole dollar amount.
An increase of $ to the total amount of funds available would increase the total annual return by $
e Assume that ASB has the original $ million in new funds available and that the planning committee has agreed to relax the requirement that at least of the new funds must be allocated to home loans by How much would the annual return change?
If required, round your answer to nearest whole dollar amount.
$
How much would the annual percentage return change?
If required, round your answer to two decimal places.
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