Question 1093159
<br>You can of course solve this problem using some variation of the standard algebraic approach, which was suggested in the first response you got to your question.  However, there is a much faster method for solving this kind of "mixture" problem, if you can understand it.<br>
The 12% target return is three-fourths of the way from the 6% of the home equity loan and the 14% of the unsecured personal loan.  That means three-fourths of the $2 million should be loaned at the higher rate.  So<br>
3/4 of $2 million = $1.5 million for the unsecured personal loan and
1/4 of $2 million = $0.5 million for the home equity loan.