Placement of preposition in a noun clause.

# 1 is correct.

Most of the time, the preposition is in front of the prepositional phrase. The difficulty is when a preposition is used as an adverb with a verb, which isn't very often. For example, the verb "hold on." You could say something like, "I told the lady to hold on," meaning, to wait a minute. You could also say, "I told the lady to hold on to her purse." See how the "on" in this case is separate from the "to"? When using "on" with "hold," "on" is acting like an adverb, not a preposition. It's not too common, compared to regular prepositional phrases. If you had a title to a book, "Hold On to Your Horses," the "on" should be capped, since it's an adverb, although I've seen some folks miss that even at publishing houses. I hope this helps. If you see a preposition after a verb, that's when you could think about whether it's really functioning as a preposition or if it's functioning as an adverb. You can also look up the verb in a good dictionary and clearly see "hold on" listed after the verb "hold" as an option and then you will know that the "preposition" "on" is functioning as an adverb.

I got it. Thanks for the reply.