Interest Expense Calculation Summary

Loan Details

• Amount borrowed: $50 million
• Loan term: 1 year
• Interest rate: 9%

Interest Expense Calculation

• Calculation period: September 1 to December 31 (4 months)
• Annual interest calculation:
  • Total interest for 1 year: $50 ext{ million} \times 0.09 = 4.5 \text{ million}$
• Interest for 4 months:
  • Formula: $\frac{4}{12} \times 4.5 \text{ million} = 1.5 \text{ million}$

Conclusion

• Interest expense to be recorded by December 31: $1.5 million