Elizabeth made the following interest-free loans during the year. Assume that tax avoidance is not a principal purpose of any of the loans. Assume that the relevant Federal rate is 5% and that the loans were outstanding for the last six months of the year. Borrower Amount Borrower’s Net Investment Income Purpose of Loan Richard $6,500 $0 GiftWoody $7,800 $525 Purchase stockIrene $132,500 $0 Purchase residenceWhat are the effects of the imputed interest rules on these transactions? If required, round your final answer to the nearest dollar. a. Richard is not subject to the imputed interest rules because the $10,000 exception does apply. b. The $10,000 exception does not apply to the loan to Woody because the proceeds were used to purchase income producing assets. Because the $1,000 exception applies to this loan, no interest is imputed. c. None of the exceptions apply to the loan to Irene because the loan was for more than $100,000