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The U-Save Loan Company is planning its operations for the next year. The company makes four types of loans, listed below, together with the annual
The U-Save Loan Company is planning its operations for the next year. The company makes four types of loans, listed below, together with the annual return (in percent) to the company. Legal requirements and company policies place the following limits on the various types of loans Signature loans may not exceed 10 percent of the total amount of loans. The amount of signature and furniture loans together may not exceed 20 percent of the total amount of loans. First mortgages must be at least 40 percent of the total mortgages and at least 20 percent of the total amount of loans. The company can lend a maximum of 1.5 million dollars next operating period. Tvpe Signature loan Fumiture loan Second Home Mortgage First Home Mortgage Annual Return (percent) 15 12 10 U-Save wants to know the amounts it should invest in each type of loan to maximize its total annual return. Formulate this problem as a linear programming problem and solve it using MS Excel Solver
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