Inflation plays a role in Powerball jackpot amount
NASHVILLE, Tenn. (WSMV) - Monday’s Powerball jackpot has grown to $1 billion and inflation played a role in making the jackpot that high.
Monday’s estimated jackpot is the second highest in Powerball history and the fifth largest in U.S. lottery history.
At Foster’s Market on Murfreesboro Pike, a clerk at the store said they had sold about 800 Powerball tickets on Monday.
With the federal government increasing interest rates to reduce inflation, the higher interest rate has allowed for this Powerball payout to be at least $100 million more than it would have been just a few months ago, according to Tennessee Lottery officials.
“I’m going to pick my own numbers, sit in my car and fill out my own ticket,” Michael Ridley said before buying lottery tickets at Foster’s Market.
It was a busy day at Foster’s with lottery players coming and going, hoping for a chance to win the $1 billion jackpot.
“I’ll take care of some bills, and then I’m going to get away,” Ridley said of what he would do if he won Monday’s lottery drawing. “I’m going to hide from everybody.”
If someone wins the drawing on Monday, that person would get about $497 million in a cash payout or take the $1 billion annuity over 30 years.
“That cash option amount of $497 million advertised is based off of sales and the amount of funds we have available to then go out and purchase annuities to be funded over that 30-year period to generate $1 billion in payment to players in annuity if they choose that option,” Tennessee Lottery Chief Financial and Information Systems Officer Andy Davis said.
Tennessee Lottery officials said part of what has led to the $1 billion jackpot is higher interest rates.
“Rising interest rate which is interest rate on government security allows us to go out and buy government security to fund this jackpot with a high interest rate because this is a raised interest rate,” Davis said.
The same high interest rates Feds are using to combat inflation affecting things like groceries. Officials said with interest rates three months ago, the jackpot would have been several million dollars lower.
“A couple months ago the same $497 million that we have available would only be able to fund a jackpot of $845 million over a 30-year period because on government security was lower than it was today,” Davis said.
The Tennessee Lottery said as of Friday, Oct. 28, the Powerball game alone has generated more than $2.13 billion in prizes in the state and the estimated return to education from Powerball sales is $906 million.
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