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Construction began on January 1, 2019 and the building was completed on July 1, 2020.

January 1, 2019 $1,500,000	January 1, 2020 $2,000,000
March 1, 2019 $750,000	March 31, 2020 $1,200,000
June 1, 2019 $1,200,000	Building complete July 1, 2020
July 31, 2019 $600,000
September 1, 2019 $300,000

On January 1, 2019, ALMO obtained a $6,000,000 construction loan with a 5% interest rate. The loan was outstanding for 2019 and 2020. The companys other interest-bearing debt included two long-term notes of $3,000,000 and $4,000,000 with interest rates of 8% and 7%, respectively. Both notes were outstanding during all of 2019 and 2020. Interest is paid annually on all debt. The companys fiscal year end is December 31.

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Question 1

2 pts

Using the information above, if the average approach is used the amount of interest capitalized for 2019 should be? (round to the closest whole dollars with no dollar sign but include commas).

NOTE: Calculate your interest rate to this level X.XX%