Question

CALCULATOR FULL SCREEN PRINTER VERSION BACK NEXT Brief Exercise 10-03 Wildhorse Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,028,000 on March 1, $1,308,000 on June 1, and $3,091,450 on December 31. Wildhorse Company borrowed $1,082,890 on March 1 on a 5-year, 13% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 5-year, $2,243,100 note payable and an 11%, 4-year, $3,364,500 note payable. Compute the weighted average interest rate used for interest capitalization purposes. (Round answer to 2 decimal places, e.g. 7.58%.) Weighted average interest rate Click if you would like to Show Work for this question: Open Show Work

Answer 1

Answer:

Weighted average interest rate of all other debt
Debt	Amount($)	Interest rate	Interest amount($)
10% Note	22,43,100	10%	2,24,310
11% Note	33,64,500	11%	3,70,095
Totals	56,07,600		5,94,405
Weighted average rate (total interests/ total debt)=594,405/56,07,600 =10.60%