Sandusky Company borrowed $12,000 from the Lakeside Bank by issuing a 10% three-year installment note. Sandusky agreed to repay the principal and interest by making annual payments in the amount of $4,825.38. Based on this information, the amount of the interest expense associated with the second payment would be_________.

a) $1,608

b) $1,200

c) $837

d) $536