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    Financial Management: Calculate interest rate and amount of interest on debt

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    What formula do I use to calculate the following question?

    A firm has notes payable of $ 1,546,000, long term debt of 13,000,000 and total interest expense of $1,300,000. If the firm pays 8 percent interest on its long-term debt, what interest rate does it pay on its notes payable?

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    Solution Summary

    The solution shows the answer with the mathematical calculations.