Coronado Industries is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures were $6350000 on March 1, $5250000 on June 1, and $8550000 on December 31. Coronado Industries borrowed $3230000 on January 1 on a 5-year, 14% note to help finance construction of the building. In addition, the company had outstanding all year a 12%, 3-year, $6430000 note payable and an 13%, 4-year, $12650000 note payable.

What is the weighted-average interest rate used for interest capitalization purposes?

a. 12.51%

b. 12.66%

c. 13.00%

d. 12.86%