A Canadian company has a calendar year end. On January 1, the company borrowed $500,000 U.S. dollars. The loan is to be repaid in four years, and interest at 8% to be paid every December 31. The loan and applicable interest are both to be repaid in U.S. dollars. The following exchange rates were in effect during the first year of the loan:

January 1 US $1 = CDN $1.465

December 31 US $1 = CDN $1.480

Average US $1 = CDN $1.475

What is the combined exchange gain or loss for both the loan and interest?

$6,800 gain

$5,900 loss

$6,850 loss

$8,250 gain

$7,700 loss