Response to the following questions:
1. Calculate the future value at the end of the third period of an annuity due consisting of three cash flows of $1,000 each, each one year apart. Use a 6% compounded interest rate per year.
2. Suppose that you have won the Florida Lotto worth $18 million. Further suppose that the State of Florida will pay you the winnings in 20 annual installments, starting immediately, of $900,000 each. If your opportunity cost is 10%, what is the value today of these 20 installments?