In this paper we apply a vector representation of physical optics, sometimes called polarization aberration theory to study image formation in astronomical telescopes and instruments. We describe image formation in-terms of interferometry and use the Fresnel polarization equations to show how light, upon propagation through an optical system become partially polarized. We make the observation that orthogonally polarized light does not interfere to form an intensity image. We show how the two polarization aberrations (diattenuation and and retardance) distort the system PSF, decrease transmittance, and increase unwanted background above that predicted using the nonphysical scalar models. We apply the polarization aberration theory (PolAbT) described earlier (Breckinridge, Lam and Chipman, 2015, PASP 127, 445-468) to the fore-optics of the system designed for AFTA-WFIRST- CGI to obtain a performance estimate. Analysis of the open-literature design using PolAbT leads us to estimate that the WFIRST-CGI contrast will be in the 10-5 regime at the occulting mask. Much above the levels predicted by others (Krist, Nemati and Mennesson, 2016, JATIS 2, 011003). Remind the reader: 1. Polarizers are operators, not filters in the same sense as colored filters, 2. Adaptive optics does not correct polarization aberrations, 3. Calculations of both diattenuation and retardance are needed to model real-world telescope/coronagraph systems.