Martin Redeemed $3,000 (Principal of $2,000 and Interest of $1,000)of

question 38

Multiple Choice

Martin redeemed $3,000 (principal of $2,000 and interest of $1,000) of Series I Savings Bonds to pay qualified higher education expenses.His qualified expenses for the year totaled $2,500 and AGI consists of wages of $20,000.What is the amount of interest that Martin must include in income? (Round interim calculations to three decimal places)

• A)$0.
• B)$833.
• C)$167.
• D)$1,000.

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Definitions:

Abbreviation

A shortened form of a word or phrase used to represent the full term.

Liter

A metric unit of volume equal to 1,000 cubic centimeters or approximately 0.26 US gallons.

Cancer

A group of diseases involving abnormal cell growth with the potential to invade or spread to other parts of the body.

Mcg

Microgram, a unit of measure equal to one millionth of a gram or one thousandth of a milligram.