It’s safe to say that a billion dollars doesn’t hold the same value it once did, especially when it comes in the form of a lottery jackpot. The Powerball prize has now surpassed that mark, with Wednesday’s estimated jackpot sitting at a whopping $1.2 billion. The Wall Street Journal examines the diminishing cash value that accompanies such a staggering prize. The Federal Reserve shoulders much of the blame for this decline. According to NerdWallet, the $1.2 billion is not currently sitting idly in a Powerball vault. Instead, if the money allocated for the jackpot is invested in a bond portfolio for thirty years, it eventually accumulates to reach $1.2 billion. Here’s where the Federal Reserve factors into the equation.
As the Journal explains, the Federal Reserve’s current policy of raising interest rates to a 22-year high means that it takes far fewer 2023 dollars to purchase bonds that will pay out a billion dollars by 2052. This is why the cash value of the Powerball jackpot was $490 million on Monday, but due to the impact of high interest rates, it transformed into a $1.04 billion jackpot. This makes it the smallest 10-figure jackpot in history, and the Journal compares it to the nearly equivalent $1 billion Mega Millions jackpot in 2021, where lower interest rates allowed it to reach the billion-dollar mark.
If someone is fortunate enough to win the jackpot on Wednesday and chooses the cash prize, they will receive $551.7 million, which is less than half of the advertised total. According to ABC News, the $1.2 billion jackpot is the third-largest in Powerball history and the seventh-largest among all US lotteries. (Read more lottery stories.)
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
