A bank is attempting to determine where its assets should be invested during the current year. At present, $500,000 is available for investment in bonds, home loans, auto loans, and personal loans. The annual rates of return on each type of investment are known to be the following: bonds, 10%; home loans, 16%; auto loans, 13%; and personal loans, 20%. To ensure that the bank’s portfolio is not too risky, the bank’s investment manager has placed the following three restrictions on the bank’s portfolio:■ The amount invested in personal loans cannot exceed the amount invested in bonds.■ The amount invested in home loans cannot exceedthe amount invested in auto loans.■ No more than 25% of the total amount invested can be in personal loans. Help the bank maximize the annual return on its investment portfolio.
A bank is attempting to determine where its assets should be invested during the current year. At present, $500,000 is available for investment in bonds, home loans, auto loans, and personal loans. The annual
■ The amount invested in personal loans cannot exceed the amount invested in bonds.
■ The amount invested in home loans cannot exceedthe amount invested in auto loans.
■ No more than 25% of the total amount invested can be in personal loans. Help the bank maximize the annual return on its investment portfolio.
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