Adirondack Savings Bank (ASB) has $1 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 7% for home loans, 12% for personal loans, and 9% for automobile loans. The banks planning committee has decided that at least 40% 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 60% of the amount allocated to automobile loans.

For the homework problem from the textbook, you have to use LINDO to answer all questions in the problem. In other words, the homework problems from the textbook this week should be done with the LINDO computer output. Again, whenever you are asked to do your problem with LINDO, you have to solve your problem with LINDO, get the computer output, and answer each question by finding the number, figure, or information needed from the computer output.

A. formulate a model that can be used to determine the amount of funds ASB should allocate to each type of loan in order to maximize the total annual return for the new funds.