On January 1 of year 1, Arthur and Aretha Franklin purchased a home for $1.98 million by paying 280,000 down and borrowing the remaining $1.70 million with a 5.4 percent loan secured by the home. The Franklins paid interest only on the loan for year 1 and year 2 (unless stated otherwise).

a. What is the amount of interest expense the Franklins may deduct in year 2 assuming year 1 is 2017?