Wednesday, January 6, 2016

The Return On Powerball

At the current projected value of $450 million, tonight's Powerball jackpot will be the sixth largest lottery payout in history. The winner has a choice of $275.4 million today today, or 30 payments of $15 million with the first payment today. So, what is the break-even interest rate on this choice? Verify for yourself that it is about 3.8 percent. Good luck and we hope you are "stuck" with this choice.