Schiffauer Electronics Plans to Issue 10-Year,zero Coupon Bonds with a Par

Schiffauer Electronics plans to issue 10-year,zero coupon bonds with a par value of $1,000.00 and a yield to maturity of 5.25%.The company has a tax rate of 30.00%.How much extra in taxes would the company pay (or save) the second year (at t = 2) if it goes ahead and issues the bonds? Do not round your intermediate calculations.

A) $7.65
B) $8.65
C) $10.83
D) $8.94
E) $9.94