Answer:
Explanation:
Calculation of amount of interest income Paul and Jean can exclude =[tex] I \frac{E}{P+I}[/tex]
where I = interest received, E = educational expenses, P = principle.
Proceeds received                 $7,132 Â
Principle                             $5,000 Â
Interest                             $2,132 Â
Qualified Higher Educational expenses $4,000
=2132*(4000/(5000+2132))= $1,195.74 Â
Answer is 1,195.74 exclusion