If the list used for the drop-down is in cells C1, C2 & C3
Enter the value in cells D1, D2 & D3
for example C1="Annual", D1=1
If your drop-down list is in Cell A1,
enter this in cell B1:
B1 will now contain the 1, 0.5 or 0.25 based on what has been selected in A1.
You could of course embed the VLOOKUP() function in another formula, so that the formula can use the values directly.