Lottery Annuity Calculator
A lottery annuity calculator converts an advertised jackpot into the schedule of annual payments that makes up that total, then discounts those payments back to today to estimate their present value. Advertised jackpots are the sum of a multi-year graduated annuity rather than a single sum of cash, so the first payment is solved out of the advertised total using a geometric series. The estimated present value depends entirely on the discount rate the user chooses and is not the lottery's published cash option, which is set by the game operator.
An advertised jackpot is the sum of a long run of annual payments, not a pile of cash. Enter the advertised total, how many payments the game pays, and how much each one grows, and the calculator works out every payment in the schedule. Add a discount rate to estimate what that stream is worth in today's dollars.
Quick Answer
Split an advertised lottery jackpot into its annual annuity payments and estimate the present value of the stream. Enter the advertised total, the number of payments, the annual increase, and a discount rate.
The headline number. It is the sum of every scheduled payment, not a pot of cash. · e.g. 250,000,000
Whole number, 1 to 100. · e.g. 30
Enter 0 for a level schedule where every payment is equal. · e.g. 5
Your own assumption about what future dollars are worth today. Enter 0 to see the undiscounted total. · e.g. 4.5
Leave blank unless you have the figure the lottery published for this draw. · e.g. 118,000,000
About the defaults
Thirty payments growing 5% a year matches the published Powerball and Mega Millions structure. It is an example, not a universal rule: payout schedules vary by game and by jurisdiction, so change the fields to match the game you are actually looking at.
Estimate only. No tax is modelled, and this is not financial or legal advice.
First annual payment
$3,762,858.77
Rising to $15,488,436.92 by payment 30.
The present value is an estimate produced by your own discount rate. It is not the lottery's cash option, which the game operator sets from the actual prize pool. Enter the published figure above to see both side by side. Nothing here is adjusted for tax.
Year-by-year payment schedule
Payment 1 is treated as immediate, so it is not discounted. Each later payment is discounted by 4.5% per year for the number of years you wait for it.
| Payment | Years from now | Amount | Value today |
|---|---|---|---|
| 1 | 0 | $3,762,859 | $3,762,859 |
| 2 | 1 | $3,951,002 | $3,780,863 |
| 3 | 2 | $4,148,552 | $3,798,953 |
| 4 | 3 | $4,355,979 | $3,817,130 |
| 5 | 4 | $4,573,778 | $3,835,394 |
| 6 | 5 | $4,802,467 | $3,853,745 |
| 7 | 6 | $5,042,591 | $3,872,184 |
| 8 | 7 | $5,294,720 | $3,890,711 |
| 9 | 8 | $5,559,456 | $3,909,327 |
| 10 | 9 | $5,837,429 | $3,928,032 |
| 11 | 10 | $6,129,300 | $3,946,826 |
| 12 | 11 | $6,435,765 | $3,965,711 |
| 13 | 12 | $6,757,554 | $3,984,685 |
| 14 | 13 | $7,095,431 | $4,003,751 |
| 15 | 14 | $7,450,203 | $4,022,907 |
| 16 | 15 | $7,822,713 | $4,042,156 |
| 17 | 16 | $8,213,849 | $4,061,496 |
| 18 | 17 | $8,624,541 | $4,080,929 |
| 19 | 18 | $9,055,768 | $4,100,455 |
| 20 | 19 | $9,508,557 | $4,120,075 |
| 21 | 20 | $9,983,985 | $4,139,788 |
| 22 | 21 | $10,483,184 | $4,159,595 |
| 23 | 22 | $11,007,343 | $4,179,498 |
| 24 | 23 | $11,557,710 | $4,199,495 |
| 25 | 24 | $12,135,596 | $4,219,589 |
| 26 | 25 | $12,742,375 | $4,239,778 |
| 27 | 26 | $13,379,494 | $4,260,064 |
| 28 | 27 | $14,048,469 | $4,280,447 |
| 29 | 28 | $14,750,892 | $4,300,928 |
| 30 | 29 | $15,488,437 | $4,321,506 |
Examples
$250,000,000 · 30 payments · 5% annual increase
First payment $3,762,859, final payment $15,488,437
Same jackpot discounted at 4.5%
Estimated present value $121,078,878, about 48% of the advertised total
$1,000,000 · 20 payments · 0% increase
$50,000 a year, every year
Those level payments discounted at 5%
Estimated present value $654,266
How it works
The advertised jackpot is the total of every payment, so the first payment is solved out of it rather than typed in. With n payments each growing by g, the schedule is a geometric series that sums to the advertised total:
The schedule sums to the advertised total
total = P₁ × (1 + g)⁰ + P₁ × (1 + g)¹ + ... + P₁ × (1 + g)ⁿ⁻¹
First payment, graduated schedule
P₁ = total × g ÷ ((1 + g)ⁿ − 1)
First payment, level schedule (g = 0)
P₁ = total ÷ n
Present value at discount rate d
PV = sum over t = 0 to n−1 of P₁ × (1 + g)ᵗ ÷ (1 + d)ᵗ
The parts
- total = advertised annuity jackpot
- n = number of annual payments
- g = annual increase, as a decimal
- d = your discount rate, as a decimal
- t = whole years from the first payment
Payment 1 is treated as immediate, so it sits at t = 0 and is not discounted. A game paying 30 payments therefore spans 29 years of waiting, which is how both large United States games describe their own schedule.
What the calculator does
It answers two questions about a jackpot that is quoted as one big number. First, what does each individual payment actually come to, year by year. Second, what is that whole stream of future payments worth in today's dollars, given an assumption you supply about how much waiting costs you.
Nothing here recommends a payout option. The calculator reports the arithmetic on the figures you enter and stops there.
Why the advertised number is not a pile of cash
A jackpot headline is the annuity total: add up every scheduled payment and that is the number on the billboard. Powerball describes its jackpot annuity as one immediate payment followed by 29 annual payments that increase by 5% each year, and Mega Millions publishes the same shape: an initial annual payment, 29 more after it, each one 5 percent larger than the last. Because the payments grow, the early ones are well below a simple average, and because they are spread across three decades, the later ones are worth less in today's money than their face value suggests.
Estimated present value versus the published cash option
These are two different things and the calculator never conflates them.
- Estimated present value is computed here, from your discount rate. Change the rate and the number changes. It is a modelling result.
- Published cash option is the lump sum the game operator announces for a specific draw. It is a fact about that draw, not something this page can derive.
How that lump sum is determined varies by game, so it is worth reading the rules of the one you are looking at rather than assuming a shared definition. Mega Millions describes its cash option as a one-time payment equal to the cash in the jackpot prize pool, based on actual sales. Powerball describes its cash value as the money that would need to be in the prize pool on the day of the drawing to fund the estimated annuity. Both note that the advertised figures are estimates until sales are final, and both are quoted before tax.
The optional cash-option field exists so you can put the real published number next to the estimate and see the gap, rather than having a discounted figure presented to you as though it were the official one.
Worked example
A $250,000,000 advertised jackpot, 30 payments, 5% annual increase, discounted at 4.5%:
- Solve the first payment: 250,000,000 × 0.05 ÷ (1.0530 − 1) ≈ $3,762,859
- Each later payment is 5% larger, so payment 30 is 3,762,859 × 1.0529 ≈ $15,488,437
- The 30 payments add back to $250,000,000, which is the advertised total
- Discounting each payment at 4.5% and adding them up gives an estimated present value of about $121,078,878, roughly 48% of the advertised total
For a level schedule the first step is simpler: $1,000,000 paid in 20 equal instalments is $50,000 a year, because with no annual increase the first payment is just the total divided by the number of payments.
Assumptions and limitations
- Payments are annual, the first one is immediate, and the increase is a fixed percentage compounding each year. Games that pay on a different rhythm are not modelled.
- No tax of any kind is applied. Every figure is gross.
- The discount rate is a single flat annual rate. Real interest rates move, and the rate used to fund a lottery annuity is set by the operator, not by you.
- The defaults are an example drawn from two specific games. They are not a universal payout rule and should be replaced with the actual terms of the game you are looking at.
- Prize pool sizes, jackpot estimates and cash options move with ticket sales and interest rates right up to the draw.
- This is arithmetic, not tax, legal, or financial advice.
Doing it by hand
To find the first payment without the calculator, raise one plus the growth rate to the number of payments, subtract one, then divide that into the advertised total multiplied by the growth rate. For the present value, multiply each payment by one divided by one plus your discount rate raised to the number of years you wait for it, then add the results. With no annual increase, the first step collapses to dividing the total by the number of payments.
Sources
- Powerball FAQs for the one immediate payment followed by 29 annual payments increasing 5% a year, and for the cash value as the amount needed in the prize pool on the day of the drawing to fund the estimated annuity. Verified 2026-08-15.
- Mega Millions FAQs for the initial payment followed by 29 annual payments, the 5 percent annual increase, and the description of the cash option as a one-time payment equal to the cash in the jackpot prize pool. Verified 2026-08-15.
Both sources describe their own game only. Neither is a statement about lotteries in general.
Related tools
- Annuity calculator for a level payment stream where you know the payment and want its future and present value.
- Present value calculator for discounting a single future lump sum back to today.
- Future value calculator for growing a sum forward instead of discounting it back.
- NPV calculator for discounting an uneven series of cash flows you enter one by one.
- All money calculators.
Note. Every figure on this page is an estimate built from the values you entered, before tax and before any fees. It is not tax, legal, or financial advice, and it does not say which payout option suits any particular person.
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Frequently asked questions
Because a graduated schedule starts low and climbs. If the payments grew by nothing, a $250 million jackpot paid in 30 instalments would be $8,333,333 each. With a 5% annual increase the same $250 million total starts at about $3.76 million and finishes at about $15.49 million. The total is identical; the shape is not. Set the annual increase to 0 to see the level version.
No, and the calculator keeps them separate on purpose. The present value shown here is an estimate produced by the discount rate you typed in. The cash option is a figure the game operator publishes for a specific draw, set from the actual money in the prize pool. They are usually in the same neighbourhood, and they are not the same number. If you have the published figure, enter it in the optional field and the calculator will show both alongside each other rather than pretending one is the other.
There is no single correct value, which is why the field is yours to set rather than a fixed assumption. The discount rate answers the question "what would a dollar received in ten years have to be worth today for me to be indifferent?" A higher rate values distant payments less and pulls the present value down; a lower rate pulls it up. Try a range rather than one number, and treat the output as a sensitivity check rather than a valuation.
No. Nothing on this page is adjusted for federal, state or local tax, and no withholding is modelled. Every figure is a gross amount. Lottery prize taxation depends on jurisdiction and on personal circumstances, so a real comparison needs advice specific to your situation.
No. Thirty payments with a 5% annual increase is the published Powerball and Mega Millions structure, which is why the calculator opens with it, but payout schedules differ by game and by jurisdiction. Smaller state games, international games and older draws can use a different payment count, a different growth rate, or level payments with no increase at all. Change the fields to match the game in front of you rather than assuming this default applies.
One row per payment. The amount column is the gross payment for that year, and the value-today column is that same payment discounted back to the present at your rate. Payment 1 is treated as immediate, so it is not discounted at all and its two columns match. Adding up the value-today column gives the estimated present value in the result panel.
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