James Jones works for the Bank of Montreal. The bank provides loans to its employees at an annual interest rate of3%.On April 1 of the current year the bank provides James with an employee loan in the amount of$36,000at the annual interest rate of3%.The loan requires annual principal repayments of$3,000on April 1 of each year Jamesmakes the first annual repayment in the following year. Assume that Canada Revenue Agency's prescribed interest rates for the current year are as follows:

Q1 (Jan. 1 to Mar. 31) = 9%

Q2 (Apr. 1 to June 30) = 4%

Q3 (July 1 to Sept. 30) =9%

Q4 (Oct. 1 to Dec. 31) =4%

Calculate the taxable benefit to be included in employment income for

Jame ones in the current year. Round your answer to the nearest dollar.

Choose the correct answer.

A.

$5,040

B.

$2,340

C.

$725

D.1539

$