The answer is B but I dont know why

Problem 5 Spring Hill College provides on-campus housing in Fairways Apartments for its full-time faculty members during the first three years of employment. The housing is not provided for the convenience of the College. Assistant Professor of Law Cort Case pays $3,600 annual rent for use of a suite in the Rubin building with an appraised value of $160,000 and an annual rental value of $7,500. How much must Case recognize as gross income in year 1? Gross income (place letter in blank) A. $3,900 B. $4,400 C. $3,600 D. $7,500 E. SO