Pay $ 2, choose six numbers and you can win $ 1.3 billion on Wednesday night.
Thus, at least promises the Lottery Association of several countries, which owns the Powerball lottery. Jackpot is the fifth largest record. Saturday Night Lack nobody won Jackpot when it allegedly was $ 1.1 billion, so it is still rising.
Is it worth it? Everyone knows that most people have a lottery a losing game. States support that they can get money without raising taxes. Ever since 1992 Powerball has been launched and has raised $ 36 billion in cash, reports a multifaceted lottery association. Or, when he put it, he was released from the people playing him 36 billion dollars (as well as their share of all costs).
But when does the accumulated jackpot become so great that mathematics actually starts to work in your favor?
Cut into persecution: not yet. No, not even the supposed $ 1.3 billion. I’m sorry, people.
The Lottery Association of several States says you have 1 in $ 292 million. Chances to choose all six winning numbers. Since $ 1.3 billion is supposed to be Jackpot divided by $ 292 million, you realize $ 4.45, you realized that a $ 2 ticket will be stolen, right?
Wrong. First, $ 1.3 billion is an illusory figure. This is the total amount of payments you would win in 30 years. MSLA says the payment of each year will be 5% higher than last year. The payment of the first year will be only around $ 20 million. You will raise a total of about $ 250 million in the first 10 years. The highest annual benefits will be in the future for many years.
If you take the money in advance, you will get $ 589 million. USD or just less than half of the alleged Jackpot number, says MSLA.
Oh, these numbers are before taxes. So, when you pay the highest federal income tax rate, 37%, if you make the prize in advance, you will only raise $ 371 million after taxes. USD. It also ignores state and local taxes.
And this number divided from you 1 of $ 292 million. Odds, each ticket is worth $ 1.27.
To understand mathematics, I visited Arnold Barnett, Professor of George Eastman Management Science and MIT SLOAN Management Professor. “The betting value for $ 2 is $ 584 million, which would give an average $ 2 return,” he says. And that, he adds, would be enough to get a $ 2 ticket worth the price you pay. This does not mean actual return on investment.