On September 1, 20X1, George bought a $10,000 three-year GIC that pays 9% interest per year, compounded yearly. No interest is received until the maturity date of the GIC on August 31, 20X4. Which one of the following statements is correct, assuming the figure is rounded to the nearest dollar?

Question 5 options:

1)

In 20X3, George must report $981 of interest income.

2)

In 20X4, George must report all interest earned on the GIC.

3)

In 20X2, George must report $927 of interest income.

4)

In 20X1, George must report $300 of interest income.