In 2020, Mr. and Mrs. Duncan redeem Series EE bonds and receive $16,000, consisting of $12,000 of principal and $4,000 of interest. Net qualifying educational expenses total $11,000. They are married filing jointly and have other AGI of $131,550. How much interest income must be included in their income in 2020 because of the redemption of savings bonds?

a. $4,000

b. $2,350

c. $1,650

d. $1,250

e. None of the answers provided is correct.