The following are the financial statements for a Bank (as of 12/31/2012):

Income statement

Interest on U.S. Treasury & agency securities $44,500

Interest on municipal bonds 60,000

Interest and fees on loans 189,700

Interest paid on interest-checking accounts $33,500

Interest paid on time deposits under $ 100,000 72,000

Interest paid on jumbo CDs 101,000

Fees received on mortgage originations $23,000

Service charge receipts 41,000

Trust department income 15,000

Provisions for loan losses = $ 18,000

Net interest income after provisions = $68,700

Employee salaries and benefits $145,000

Occupancy expense 22,000

Income before income taxes $19,300

Income taxes 6,562

Net income = $12,738

2. The interest expense for the year is? Show your calculation.

a. $206,500

b. $194,500

c. $294, 500

d. $202,500

e. $254,500