Your manager has decided to borrow $5,000,000 on 25 July 2019. Annual repayments are to be made in equal instalments over the next five years, including interest, beginning on 25 July 2019. Interest is charged at 4% per annum on the outstanding balance and is paid with each annual instalment. Required: Prepare the balance sheet extract for liabilities as at 30 September 2019

the answer on solution paper is

Liabilities Current Loan $1,000,000 Interest Payable $37 260 Non Current Loan $4,000,000 Total Liabilities $5,037,260

I want to know why the interest payable is 37260