Barbaras combined federal and provincial marginal tax rate is 24.5%. If she invests $2,000 every year for 5 years, how much after-tax income will she earn on her investment if interest is paid at a rate of 3.5%, compounded quarterly? Barbara pays quarterly tax instalments due to her high investment income. Hint: Transform the interest rate to an after-tax rate by multiplying by (1 tax rate).

1. $829.71
2. $734.84
3. $580.80
4. $548.20