(Linear Programming)

People's Bank is formulating its loan policy for next year. The bank has three kind of one-year bridging loans: property loans, vehicle loans and enterprise loans. The interest rate and the bad-debt percentage for each loan type are as follows:

Loan Type	Interest Rate (per annum)	Bad-debt percentage
Property	4.5%	2.1%
Vehicle	1.6%	0.7%
Enterprise	1.9%	0.9%

For example, if a borrower obtains an property loan of $100, he needs to repay $104.5 to the bank after one year. The bad debt percentage is the uncollectible loan amount divided by the total loan amount. For example, 2.1% of the property loan amount is not recoverable. In other words, every dollar lent out has a 2.1% probability of not returning to the bank.

The bank has decided to lend up to $9 million. To support the real estate market, at least $3 million will be allocated for property loans. To have a diversified customer base, vehicle loans need to account for at least 15% of total loans and enterprise loans need to be at least 40% of vehicle loans. To ensure smooth operations, the overall bad-debt percentage shall not exceed 1.25%. The bank wants to know how much loan amount to allocate for each loan type in order to maximise the bank's net return. Develop the linear programming (LP) model for the problem and solve it using Excel solver.

There should be three screenshots:

1. The problem worksheet just before clicking the Solver command: after developing the Excel Solver model, press Ctrl + ~ (tilde) to show formulas in cells, and then take a screenshot with row and column headings

2. The Solver Parameters dialog just before clicking Solve

3. The Answer Report created by the Solver. Please limit the answer to within three pages

(20 marks)