Question - On March 1, 2016, XYZ, Inc. obtained a $35,000,000 5-year loan at 12% to help finance construction of a building. During the year the company also had the following debt:
$2,000,000 Note Payable at 8.5%
$3,500,000 Note Payable at 7.8%
Calculate the weighted-average interest rates that management should use for interest capitalization purposes. Show your calculation in detail.