# Correction to Straight Dope Article about Lottery Winnings

**URL:** <https://boards.straightdope.com/t/correction-to-straight-dope-article-about-lottery-winnings/592294>\
**Category:** Cecil's Columns/Staff Reports\
**Created:** [August 11, 2011, 3:27am UTC](https://boards.straightdope.com/t/correction-to-straight-dope-article-about-lottery-winnings/592294 "2011-08-11T03:27:09Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![haymat](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@haymat](https://boards.straightdope.com/u/haymat)\
**Post date:** [August 11, 2011, 3:27am UTC](https://boards.straightdope.com/t/correction-to-straight-dope-article-about-lottery-winnings/592294/1 "2011-08-11T03:27:09Z")

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This comment is about the Straight Dope article, _If I win the lottery, should I ask for a lump sum or an annuity?_, dated March 2, 2004, located at the following link:  
[http://www.straightdope.com/columns/read/2149/if-i-win-the-lottery-should-i-ask-for-a-lump-sum-or-an-annuity](http://www.straightdope.com/columns/read/2149/if-i-win-the-lottery-should-i-ask-for-a-lump-sum-or-an-annuity)

The article makes the following statement about the equivalence:  
_The cash value or present value of an annuity is the amount of money, today, that is mathematically equivalent to the sum of the payments, given a particular interest rate. By equivalent I mean that, if you deposited the cash value in an account bearing the agreed-upon interest rate for the term of the annuity, the accumulated amount would equal the face value._

The cash value is mathematically equivalent to the series of payments—not the sum, or face value. For example you would only need 3.72% annual interest rate to grow $500K to $1M in 19 years, which conflicts with the stated California Lottery example of $1M face value, $500K present value, $50K period payment, at 8.92% rate. I agree with the 8.92% annuity vs present value analysis; it’s the quoted text that I think should be corrected.

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**Author:** ![C\_K\_Dexter\_Haven](https://avatars.discourse-cdn.com/v4/letter/c/b2d939/32.png) [@C\_K\_Dexter\_Haven](https://boards.straightdope.com/u/C_K_Dexter_Haven)\
**Post date:** [August 11, 2011, 1:36pm UTC](https://boards.straightdope.com/t/correction-to-straight-dope-article-about-lottery-winnings/592294/2 "2011-08-11T13:36:24Z")

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Sounds reasonable as a change, I’ll have it done. Thanks.