Tax Savings.John and Cheryl just borrowed $21,470 on a home equity line of credit. The interest rate for the loan is 6.74 % for the entire year, and they took out the loan on May 1. John and Cheryl are in the 25% tax bracket. What will be their tax savings for the first year ending December 31? (Hint: assume that all of the interest paid this year is tax deductible.)

Their tax savings for the first year ending December 31 will be $