Question: - A week_4.pdf - Adobe Acrobat Reader DC (32-bit) Dosya Dzenle Grnm mzalama Pencere Yardm Ana Sayfa Aralar week_4.pdf X ? Oturum A 2 /

- A week_4.pdf - Adobe Acrobat Reader DC (32-bit)

- A week_4.pdf - Adobe Acrobat Reader DC (32-bit) Dosya Dzenle Grnm mzalama Pencere Yardm Ana Sayfa Aralar week_4.pdf X ? Oturum A 2 / 18 %120 Example 2.4-1 (Bank Loan Model) Bank One is in the process of devising a loan policy that involves a maximum of $12 million. The following table provides the pertinent data about available loans. Type of loan Interest rate Bad-debt ratio Personal Car Home Farm Commercial .140 .130 .120 .125 .100 .10 .07 .03 .05 .02 Bad debts are unrecoverable and produce no interest revenue. Competition with other financial institutions dictates the allocation of at least 40% of the funds to farm and commercial loans. To assist the housing industry in the region, home loans must equal at least 50% of the personal, car, and home loans. The bank limits the overall ratio of bad debts on all loans to at most 4%. Mathematical Model: The situation deals with determining the amount of loan in each category, thus leading to the following definitions of the variables: x1 = personal loans (in millions of dollars)

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