Very confused how this isn't correct. I have also tried 7,975 which is also wrong. Any help would be great, thanks.

Elizabeth makes the following interest-free loans during the year. The relevant Federal interest rate is 5%, and none of the loans are motivated by tax avoidance. All of the loans were outstanding for the last six months of the tax year. Borrower's Other Net Borrower Amount Investment Income Purpose of Loan Richard 2.250 Woody Irene $159,500 $0 $300 $0 Gift Stock purchase Purchase principal residence $2,700 What are the effects of the imputed interest rules on these transactions