The answer is that the restriction stipulating that farm
and cornmercialloans account for at least 40% of all loans (constraint 2) forces the solution
to allocate $4.8 million to commercial loans at the lower /let rate of .078, hence lowering
the overall interest rate to .0864 x 7.2
1
; .078 x 4.8 = .08034. In fact, if w-e'remove
constraint 2, the optimum will allocate all the funds to home loans at the higher 8.64% rate.