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A Local SME Bank provides 4 types of loans to its customers and these loans yield the following...

A Local SME Bank provides 4 types of loans to its customers and these loans yield the following annual interest rates to the Bank:

1. Personal Loan 1: 14%

2. Personal Loan 2: 20%

3. Home Loan: 20%

4. Overdraft: 10%

The Bank has a maximum foreseeable lending capability of Rs700 million and is further constrained by the policies:

a) Personal Loan 1 must be at least 45% of all personal loans issued and at least 15% of all loans issued (in Rs terms);

b) Personal Loan 2 cannot exceed 40% of all loans issued (in Rs terms);

c) To avoid public displeasure and the introduction of a new tax, the average interest rate on all loans must not exceed 10%.

Formulate the Linear Programming Problem.

Apr 10 2020 View more View Less

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