Lian had purchased a home a few years ago for $120,000. Interest rateshave dropped since she purchased the home. On July 1 of the current year shere-financed the mortgage, taking out a new $100,000, 20-year mortgage fromthe bank. In order to obtain the new mortgage, she had to pay $2,000 inpoints. Through her monthly mortgage payments, Lian pays $4,000 of interestto the bank by year-end. Lian can deduct mortgage interest expense of

A) $4,000.

B) $4,100.

C) $4,050.

D) $6,000.