In February 2024, Paul and Jean, a married couple, cashed a qualified Series EE savings bond they bought in November 2011. They received proceeds of $7,132, representing principal of $5,000 and interest of $2,132. In 2024, they helped pay their daughter’s college tuition. The qualified education expenses they paid in 2024 totaled $4,000. They are not claiming an education credit for the expenses, and they do not have an education IRA. How much interest income can Paul and Jean exclude?
$2,132
$1,196
$1,000
$4,000