You just won the state lottery, and you have a choice between receiving
$4,000,000 today or a 15-year annuity of $450,000 with the first payment coming one year
from today. What rate of return is built into the annuity?

Using a Spreadsheet for Time Value of Money Calculations:

To Find

Enter This Formula

Future Value

=FV(rate,nper,PMT,pv)

Present Value

=PV(rate,nper,pmt,fv)

Discount Rate

=RATE(nper,pmt,pv,fv)

Number of periods

=NPER(rate,pmt,pv,fv)

Payment (PMT)

=PMT(rate,nper,pv,fv)

Annuity Due: If the calculation is based on annuity due, enter comma (,) and 1
after the last item within parenthesis.

Cash outflows should be recorded with a negative sign.

Thanks.