• Got_Bent@lemmy.world
    link
    fedilink
    arrow-up
    36
    arrow-down
    2
    ·
    1 year ago

    The $1.28 billion is if you take monthly payments over a term of twenty or thirty years.

    Very few people do that.

    Instead, they take an up front lump sum payment.

    That up front payment is the amount the lottery commission would put into interest bearing bonds to pay out over time, getting to the $1.28 billion.

    The lump sum payment is usually about half the amount you would receive if you took payments over time. If this doesn’t make sense, it’s a tangential discussion on the time value of money and its net present value.

    I got six hundred million by cutting $1.2 billion in half since this is casual Internet discourse, and I consider very rough cocktail napkin math for illustrative purposes to be perfectly acceptable.

    • BigJim@lemmy.world
      link
      fedilink
      arrow-up
      1
      ·
      1 year ago

      Damn I think I would take the monthly payments. I wouldn’t complain about ~$3m a month for 30 years. Whatever problems you have that money would resolve would probably be resolved in the first month.

      • TheChurn@kbin.social
        link
        fedilink
        arrow-up
        17
        arrow-down
        1
        ·
        1 year ago

        The 433.7 million is after paying taxes on the lump sum.

        Nominal Jackpot: 1.2B
        Lump sum: ~600 M
        Taxes on lump sum: ~167M
        Post-tax winnings: 433.7M

      • Got_Bent@lemmy.world
        link
        fedilink
        arrow-up
        16
        arrow-down
        1
        ·
        1 year ago

        My point was that the IRS didn’t take the eight hundred million stated, but probably closer to two hundred million.

        But we all love to get angry about anything and everything, especially when we think we’ve scored Internet gotcha points, so enjoy.