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A local SME bank provides 4 types of loans of its customers and these loans yield...

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A local SME bank provides 4 types of loans of its customers andthese loans yield the following interest rates to the Bank:

  1. Personal Loan 1:        14%
  2. Personal Loan 2:        20%
  3. HomeLoan:               20%
  4. Overdraft:                  10%

The Bank has a maximum foreseeable lending capability of Rs 700million and is further constrained by the policies:

  1. Personal Loan 1 must be at least 45% of all personal loansissued and at least 15% of all loans issued (in Rs terms);
  2. Personal Loan 2 cannot exceed 40% of all loans issued (in RsTerms);
  3. 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 ProgrammingProblem.

Note: To maximise interest incomewhilst satisfying the policy limitations.

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