Juan is single and retired on January 1, 2021at age 62. He is entitled to receive monthly payments of $1,500 over his life from his employer’s qualified pension plan. The payments began January 1, 2021. He contributed $71,500 to the plan prior to his retirement. Using the simplified method, how much of the payments will be included in his income for 2021?

a. $1,225.

b. $3,300.

c. $14,700.

d. $18,000.