Lottery - State Financing Please Prepare As If You Lived In

Lottery - State FinancingName:Institutional AffiliationLottery - State FinancingThe New Jersey Lottery is run by the U.S. state of New Jersey. The biggest lottery payout was for the March 23, 2013 Powerball drawing, won by Pedro Quezada, a Dominican Republic immigrant. The annuity value was $338,000,000 and cash payment option was$152 million lump sum after taxes (Alvarado, 2013).Payout options in lotteries include annuity and cash payment. Annuity is a deferred payment, made in annual payments over a span of 30 years. Previously, the annuity payout was made in equal installments, until the winner receives the entire jackpot price (Njlottery.com, 2016). However, due to complaints by consumers over the rising cost of living, the annuity is now 5% more than the previous earning. The lump sum option is where the winner decides to take the winnings in cash, which is less the original jackpot. For the New Jersey Lottery, the lump sum amount was 60% the jackpot (Njlottery.com, 2016). Annuity is the preferable of the two options of payment.The money receivable in the annuity option, earns interest, which accumulates to the full jackpot price, which may be higher than the interest earned from investing the lump sum amount. In