Teal Mountain Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $1.2 million on March 1, $0.9 million on June 1, and $3 million on December 31. Teal Mountain Company borrowed $1 million on March 1 on a five-year, 12% note to help finance the building construction. In addition, the company had outstanding all year a $1-million, five-year, 14% note payable and a $3.7-million, four-year, 16% note payable.

Calculate the appropriate capitalization rate on general borrowings that would be used for capitalization of borrowing costs.(Round answer to 2 decimal places, e.g. 52.75%.)

Capitalization Rateenter Capitalization Rate in percentages rounded to 2 decimal places

%