1) Judy Thomas has a $1,500 overdue debt for medical books and supplies at Joe's Bookstore. She has only $800 in her checking account and doesn't want her parents to know about this debt. Joe's tells her that she may settle the account in one of two ways since she can't pay it all now: (1) Pay $600 now and $900 when she completes her residency, two years from today. (2) Pay $1,500 one year after completion of residency, three years from today. Assuming that the cost of money is the only factor in Judy's decision and that the cost of money to her is 6%, which alternative should she choose? Your answer must be supported with calculations.

***Please show work so I know how to find the answer.