Instructions: Answer all questions below. Show your work. 1. Kate would like to retire in 15 years. She currently has $986,000 in her 401K. Due to the high cost of her ongoing medical treatments she will not able to contribute anything more to her retirement account going forward. She understands the concept of time value of money and believes she may still be able to retire as planned. If she expects to receive an average return of 10%, how much can she expect to have in her 401K at retirement? 2. Jackson has just begun his first career after graduating from college. Although he has some student loans to pay off, he understands the importance of saving for retirement early, so he has decided to contribute $5,000 into his 401K each year. Assuming he earns a rate of 12%, how much will he have if he continues to make the same contribution for the next 40 years? 3. 20 year-old, Juliet, has won the Lotto! She can choose between two options to receive her winnings: 1) After taxes, an annual payment of $1,000,000 for 10 years, or 2) A one-time payout. If the Lotto Commission earns a 9% average return, what amount will be offered in option #2? (Show your reasoning.)