Answer the following question:

A company loan of $180,000 to help finance the purchase of a new home in Ohio. The loan will bear interest at 2% per year payable monthly and will be made on May 1 of this year, the closing date on the purchase of the home. Assume that the prescribed rate of interest for employee loans was 4% on May 1 but decreased to 3% for the last two quarters. Ignore any effects of a leap year.

1. Is this a taxable benefit?
2. Explain what the rule is for why it would not go above 4% because that is what the prescribed rate of interest was when she got the loan.
3. Explain how the days are gotten below.

4% x 180000 x (61/365) = 1203.29

3% x 180000 x (92/365) = 1361.10

3% x 180000 x (92/365) = 1361.10

Total 3925.48

2% x 180000 x (245/365) = 2416

Total 1590.04