Question

Patrick is a loan officer at a bank. He has
$2,000,000 to lend out and has two loan programs.
His home equity loan is currently priced at 6% per
annum, and his unsecured personal loan is priced
at 14%. The bank president wants Patrick to earn
a rate of return of 12% on the $2,000,000 available.
How much should Patrick lend out at 6%?

Answer 1

Answer:

1,500,000 at 14% and 500,000 at 6%

Step-by-step explanation:

x + y = 2,000,000

.14x + .06y = 240,000

$0.14x+0.06\left(2000000-x\right)=240000\quad :\quad x=1500000$