On January 1, Cheryl, Inc., entered into a lease contract. The lease contract was an eight-year lease for a sound system with $28,000 annual lease payments due at the end of each year. The sound system's useful life is ten years. Cheryl took possession of the sound system on January 1. The present value of the lease payments under the lease contract is $173,778. The interest rate is 6%. The lease contract is a finance lease.

How much is interest expense at the end of the year? Round to two decimals.