Answer:
$7,117,000
Explanation:
There is some information missing that I looked up, hopefully the numbers are the same, but if not you can adjust them.
Weighted average expenditures:
July 1, 2015, $54 million
October 1, 2015, $22 million
February 1, 2016, $30 million
April 1, 2016, $21 million
September 1, 2016, $20 million
October 1, 2016, $6 million
we must first determine the amount of interest for 2015:
[($54 x 6/6) + ($22 x 3/6)] x 6% / 6/12 = $1.95 million
weighted average expenditures 2016:
- ($54 + $22 + $1.95 = $77.95) x 10/10 = $77.95
- $30 x 9/10 = $27
- $21 x 7/10 = $14.7
- $20 x 2/10 = $4
- $6 x 1/10 = $0.6
- total $124.25 million
interests:
- $70 x 6% x 10/12 = $3,500,000
- ($124.25 - $70) x 8% x 10/12 = $3,617,000 (rounded to nearest thousand)
- Total = $7,117,000
