We need to find financing for an home renovation project. The total amount we need to...

   

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We need to find financing for an home renovation project. The total amount we need to borrow for one year is 16000 pounds. The four available banks offer the following conditions on unsecured loans: Bank B₁ 4000 5% 7% 6% One-time processing charge 90 70 75 B₂ B3 B₁ 7000 8000 15000 8% 60 Maximal amount Yearly interest Find the optimal amounts to borrow from each bank, so that the overhead (total interest plus processing charges) is minimal. The processing charge is only payable when the amount borrowed from that bank is non-zero. We need to find financing for an home renovation project. The total amount we need to borrow for one year is 16000 pounds. The four available banks offer the following conditions on unsecured loans: Bank B₁ 4000 5% 7% 6% One-time processing charge 90 70 75 B₂ B3 B₁ 7000 8000 15000 8% 60 Maximal amount Yearly interest Find the optimal amounts to borrow from each bank, so that the overhead (total interest plus processing charges) is minimal. The processing charge is only payable when the amount borrowed from that bank is non-zero.

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