On January 1, 2018, an individual (Lender) loaned a third party $25,000 at 5% annual interest. Lender incurred loan registration fees of \$750. In 2020, Lender setup a reserve for unpaid interest of $3,000 as they did not receive any interest or principal repayments due to financial hardships of the third party. How much would Lender deduct in 2020?
Multiple Choice
$1,400
$1,250
$5,000
$3,150