Problem
Sweet Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $2,040,000 on March 1, $1,320,000 on June 1, and $3,051,830 on December 31.
Sweet Company borrowed $1,040,720 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, $2,324,600 note payable and an 11%, 4-year, $3,389,200 note payable. Compute the weighted-average interest rate used for interest capitalization purposes.