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It's because the annuity's figure is the purchasing power of those winnings at that time--the value you see as a jackpot is based on an annuity over a period of
by jonknee 13y ago
It's because the annuity's figure is the purchasing power of those winnings at that time--the value you see as a jackpot is based on an annuity over a period of years. You're buying a lottery ticket to win a $XM dollar Y year annuity, with an allowed early exit (with penalty).
- startupfounder 13y agoThe choice to take the annuity or lump sum looks like its based on projected tax rates and projected return on the investment.[0] [0] http://www.businessinsider.com/should-you-take-the-annuity-or-the-lump-sum-if-you-win-the-lottery-2013-9 http://www.businessinsider.com/should-you-take-the-annuity-o...
- xerophtye 13y agouhh... correct me if i am wrong, but the PV of an annuity is generally NOT equal to X where the annuity pays N payments of X/N So when they are saying "40 payments of $25 mil" that doesn't mean that $1B is the PV of said annuity. (I might have misunderstood you though)