Answer:
The interest rate for capitalization purposes will be of 11%
Explanation:
The company will average all the debt oustanding during the year
1,050,550 x 13% = 136,571.5
2,080,800 x 10% = 208,080
<u>3, 831,200</u> x 11% = <u> 421, 432 </u>
6,962,550 766,083.5
a debt of 6,962,550 dollars generates 766,083.5 dollars of interest:
principal x rate = interest
rate = interest / principal
766,083.5 / 6,962,550 = 0,110029 = 11%
