Task: Suppose that Congress recently amended the tax law to provide for a maximum 12% rate on interest income from U.S. savings bonds. Compute the tax savings from this preferential rate for:
1. Ms. E., who has a 15% marginal rate on ordinary income and earned $290 interest on her investment in U.S. savings bonds.
2. Mr. K., who has a 35% marginal rate on ordinary income and earned $290 interest on his investment in U.S. savings bonds.
Please show all calculations.