# Capitalized Interest Calculator

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Enter the weighted average accumulated expenditures up to the principal balance of specific borrowing, the interest rate on the specific borrowing, the weighted average accumulated expenditures in excess of specific borrowing, and the weighted-average interest rate to determine the capitalized interest.

## Capitalized Interest Calculator

Basic Calculator

Enter any 4 values to calculate the missing variable

## Capitalized Interest Formula

The following formula is used to calculate a capitalized interest.

CI = WAAE * IRB + WAAEe * WAIR

• Where CI is the capitalized interest ($) • WAAE is the weighted average accumulated expenditures up to the principal of specific borrowing ($)
• IRB is the interest rate on the specific borrowing (%)
• WAAEe is the weighted average accumulated expenditures in excess of the borrowing ($) • WAIR is the weighted-average interest rate (%) ## Capitalized Interest Definition What is capitalized interest? A capitalized interest is an amount of unpaid interest that get’s added to a loan. In other words, if loan interest is not paid on time, a lender may capitalize that interest and add it to the principal. ## Example How to calculate capitalized interest? 1. First, determine the weighted-average accumulated expenditures up to the principal. For this example, this is$20,000.00.

2. Next, determine the interest rate of the borrowing.

For this problem, the borrowing interest rate is 5%.

3. Next, determine the accumulated expenditures in excess of the principal.

In this case, the excess expenditures is $10,000.00 4. Next, determine the weighted average interest rate. The average interest rate is 4.5%. 5. Finally, calculate the capitalized interest. Using the formula, the capitalized interest is found to be: 20,000*.05 + 10,000*.045 =$1,450.00.