Suppose you just won the state lottery, and you have a choice between receiving $2,075,000 today or a 15-year annuity of $300,000, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard taxes.
1. 13.26%
2. 10.38%
3. 12.14%
4. 11.71%
5. 9.44%