Calculating Avoidable Interest

Weighted average accumulated expenditures are $160,000 on a project for which work steadily progressed during the current year. The following debt was outstanding during the current year.

Construction loan		$40,000 at 10%
Note payable		$200,000 at 8%
Mortgage payable		$60,000 at 12%

Calculate avoidable interest for the purpose of interest capitalization.

Note: Round interest rate percentage used in your calculation to two digits after the decimal; enter 2.04 for 2.044% or 2.05 for 2.045%.

Avoidable interest $Answer