How is the $3.18 hourly interest calculated based on the below-given data?

Equipment Cost Data

Equipment Purchase Price

1. Line-haul tractors = $120,000

2. Trailers = $40,000 (53-foot dry van)

Depreciation

1. Tractors = 5-year straight line

2. Trailers = 8-year straight line

Interest

1. Tractors = 6 percent APR for 5 years

2. Trailers = 6 percent APR for 8 years

Fuel

1. $3.83 per gallon for diesel

2. Line-haul tractors 5 6.0 miles per gallon

Labor Cost

1. Line-haul drivers 5 $0.45 per mile

2. PUD operation drivers 5 $22.00 per hour

Miscellaneous

1. Insurance cost 5 $0.067 per mile

2. Maintenance cost 5 $0.152 per mile

3. Billing cost 5 $1.95 per freight bill

4. Tractors and trailers are available for use 365 days, 24 hours per day

5. Administrative overhead cost =10 percent of total cost of move

TABLE 4B-1 Costing Example I. PICKUP 1. Depreciation 2. Interest Tractor 5.5hr@$2.74/hr= $15.07 Trailer $3.14 Tractor 5.5hr@$0.57/hr= $17.49 Trailer 5.5hr@$3.18/hr= $3.96