Kent invested $25,000 in a 3-year GIC at a fixed annual interest rate of 5%, compounded annually. Suppose inflation averages 3% over the 3-year term of the GIC to provide an annual real return of 2%.

Kent has a 40% marginal tax rate. What was the after-tax value in current dollars of the amount that Kent received.

$27,250

$26,500

$25,900

$25,000