Answer Happy

Question 2 Steven is the owner of a real estate investment company. He has identified four apartment buildings at each one of the four locations: Amber Villa, Boustead Riverside, Crescent Cou and Dunkin Park. Steven has approached three banks - Western Bank, Tokyo Bank and Ho Kong Bank regarding financing. Because Steven has been a good client and has maintained high credit rating in the community, each bank is willing to consider providing all or part of the mortgage loan needed on each property. Each bank has set differing interest rates on each property (rates are affected by the neighbourhood of the apartment building, condition of the property, and desire by the individual savings and loan to finance various size buildings), and each bank has placed a maximum credit ceiling on how much it will lend Steven in total. This information is summarized in the table below. Financer Western Bank Tokyo Bank Asian Bank Amber Villa 8.5 9.2 9.6 $760.000 Property (Interest Rates, %) Boustead Crescent Dunkin Court Riverside Park 8.3 10.4 11.2 10.5 12.2 10.1 11.2 10.1 9.3 $440,000 $630,000 $870,000 Maximum Credit Line ($) $900,000 700,000 500,000 Each apartment building is equally attractive as an investment. So Steven has decided to purchase all four buildings at the lowest total payment of interest. He wants to know from which banks he should borrow to purchase which buildings. More than one savings and loan can finance the same property.