For example, what is the Present Value of a typical lottery payout? For each $1 million won in most lotteries the payout is for $50,000 per year for 20 years, though in some cases the payout is $40,000 for 25 years. Our question is, is this worth close to $1 million dollars before taxes?
The expression to the left is a shorthand way of writing the
Present Value of each $1 million of lottery winnings for a lottery with a 20 year payout.
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