ACOG would be ideal, in my opinion, but out of your price range.
I have an Eo-Tech with 4x flip away magnifier on my 5.56 and I like it. The magnifier add would put it out of your price range but you could use an EoTech or Aimpoint (I prefer the sight picture of an EoTech over the Aimpoint) and add a magnifier later as your budget allows.
If you're not worried about CQB at all, I'd go with an actual scope. You don't need anything more than about 10x at 200 yards. Leupold has plenty to offer in that size and your budget. I've owned Leupold scopes all across their quality board (Rifleman, VX-III, VX-L, Mk4) and have had no complaints on any of them.