Determine the weighted average interest rate

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Question - ABC Company decided to construct a new building to be used as its company headquarters. On January 1, 2017, construction began on the project. On that same day, the company borrowed $4 million specifically for the project at an interest rate of 5%. The project was completed on June 30, 2018. Expenditures related to the project in 2017 are displayed below:

Date Amount

1/1/17 $1,200,000

3/31/17 $1,000,000

5/1/17 $2,400,000

8/31/17 $1,800,000

12/31/17 $1,100,000

In addition to the specific borrowing, ABC had two other loans outstanding for the entire year:

  • $1,500,000 @ 9%
  • $4,500,000 @ 6%

Required - Determine the weighted average interest rate of the other loans outstanding.

Reference no: EM131711696

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