Calculating Avoidable Interest Weighted average accumulated expenditures are $400,000 on a project for which work steadily progressed during the current year. The following debt was outstanding during the current year.

Construction loan	$100,000	at	10%
Note payable	$500,000	at	8%
Mortgage payable	$150,000	at	12%

a. Compute the weighted average interest rate on the general debt.

Calculation of weighted average interest rate
	Numerator		Denominator	=	Rate
General Debt	Answer		Answer	=

b. Calculate avoidable interest for the purpose of interest capitalization. Note: Use the interest rate calculated above EXACTLY as shown in your calculations below. Note: Round dollar amounts to the nearest whole dollar.

	Calculation of Avoidable Interest
		Weighted Average
		Accumulated		Avoidable
	Debt Category	Expenditures	Interest Rate	Interest
	Specific Debt	Answer	Answer	Answer
	General Debt	Answer	Answer	Answer
		Answer		Answer

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