Answer:
interest capitalized on building: 221,187.85 dollars
Explanation:
average payment:
from March 1st to December 31th:
1,908,000 x 10/12 = 1,590,000
from June 1st to December 31th:
1,308,000 x 6 / 12 = 654,000
Total: 2,244,000
weighted average rate:
2,487,900 x 10% = 248,790
3,271,400 x 11% = 359,854
total interest 608,644
total borrowing 5,759,300
average rate: 0.105680 = 10.57%
avoidable interest:
construction related debt:
1,197,510 x 12% x 9/12 = 119,751
debt subject to other debt instrument
2,244,000 - 1,197,510 = 1,046,910
1,046,910 x 10.57 % x 11/12 = 101,436.85
total avoidable interest: 119,751 + 101,436.85 = 221,187.85
