Answer:
$1200 should receive.
Step-by-step explanation:
To check whether to receive $1500 or $1200 just find the present values of each amount.
Present value of annuity $1500:
Present value of annuity = Annuity (P/A, 7%, 12)
Present value of annuity = 1500 (P/A, 7%, 12)
Present value of annuity = 1500 (7.9426)
Present value of annuity = $11913.9
Present value of annuity $1200:
Present value of annuity = Annuity (P/A, 7%, 20)
Present value of annuity = 1500 (P/A, 7%, 20)
Present value of annuity = 1500 (10.5940)
Present value of annuity = $15891
Thus, $1200 should receive.
