Why is the jackpot’s cash lump sum less than the annuity option?
The jackpot’s cash lump sum is less than the annuity option because the annuity option pays out the jackpot over a period of time, usually 30 years, while the cash lump sum is the full amount at once, but it’s discounted for present value. Additionally, the annuity option provides a regular income stream that may be more attractive to some winners than a lump sum.