The First Street Branch of Capitol Bank Has a Sum

Multiple Choice

The First Street branch of Capitol Bank has a sum of $70 million earmarked for home loans and commercial-development loans. The bank expects to realize and 8% annual rate of return on the home loans and a 6% annual rate of return on the commercial-development loans. Management has decided that the total amount of home loans is greater than or equal to 3 times the total amount of commercial-development loans. Owing to prior commitment, at least $11 million of the funds has been designated for commercial-development loans. Determine the amount of each type of loan the bank should extend to maximize it returns. What is the maximum return?

A) Bank should extend $48 million in home loans, $48 million of commercial-development loans to attain a maximum return of $5.38 million.
B) Bank should extend $59 million in home loans, $11 million of commercial-development loans to attain a maximum return of $5.38 million.
C) Bank should extend $11 million in home loans, $59 million of commercial-development loans to attain a maximum return of $5.38 million.
D) Bank should extend $11 million in home loans, $48 million of commercial-development loans to attain a maximum return of $5.38 million.
E) Bank should extend $48 million in home loans, $11 million of commercial-development loans to attain a maximum return of $5.38 million.