$2,000,000

12% $240,000
1,600,000 10.42% 166,720
$3,600,000 $406,720
2,000,000
1,800,000
3,800,000

0.12
0.1039

Weighted Avg.
1,600,000
1,000,000

0.1
0.11

240000
187020
427020 Avoidable Interest
Principlal
Interest
1,600,000
160000
1,000,000
110,000
2,600,000
270,000

Total Interest
0.10384615
Total Principal

10.39%

Actual Interest
240000
187020
110000
537020 Total Interest

Construction Loan
Short-term loan
long-term loan

Cost
Interest Capitalized
Total Cost

5200000
427,020
5,627,020
5,327,020
177567.333

Exercise 10-8 Amount

Cap period
W.A.A.E
1-Mar
$360,000 0.83333333
$300,000
1-Jun
$600,000 0.58333333
$350,000
1-Jul $1,500,000
0.5
$750,000
1-Dec $1,200,000 0.08333333
$100,000
$3,660,000
$1,500,000
Compute Avoidable Interest
$1,500,000
0.12
180000
Actual Interest
3,000,000
4,000,000
1,600,000

0.12
0.11
0.1

360000
440000
160000
960000

0.11237368
427020