Missouri Lottery website estimates a $26 million prize for the July 2, 2022 drawing.  The $26 million is to be paid as an annuity due with 30 annual payments.  What's different than in our notes is that Powerball payments increase by 5% each year. 

For a 1% interest rate, how would this increasing annuity amount affect the setup in a spreadsheet and in the Present Value of Annuity Due formula?   

All these considered, would you take the annuity or the $15.1 million lump sum?  Justify your answer in the discussion. 

Answer rating: 100% (QA)

To analyze the impact of the increasing annuity amount and determine whether to take the annuity or the lump sum we need to consider the setup in a sp... View the full answer