Brief Exercise 10-3

Splish Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,064,000 on March 1, $1,212,000 on June 1, and $3,041,210 on December 31. Splish Company borrowed $1,153,590 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, $2,441,700 note payable and an 11%, 4-year, $3,254,300 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

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