Calculating Avoidable Interest

Weighted average accumulated expenditures are $720,000 on a project for which work steadily progressed during the current year. The following debt was outstanding during the current year.

Construction loan		$180,000 at 10%
Note payable		$900,000 at 8%
Mortgage payable		$270,000 at 12%

Calculate avoidable interest for the purpose of interest capitalization.

Note: Round interest rate percentage used in your calculation to two decimal places (for example, enter 2.05 for 2.04555%).

Avoidable interest $Answer