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Path: utzoo!watmath!clyde!cbosgd!ihnp4!lzaz!mkg
From: mkg@lzaz.UUCP (Marsh Gosnell)
Newsgroups: net.consumers
Subject: Re: Question about Sweepstakes
Message-ID: <453@lzaz.UUCP>
Date: Tue, 31-Dec-85 14:58:56 EST
Article-I.D.: lzaz.453
Posted: Tue Dec 31 14:58:56 1985
Date-Received: Wed, 1-Jan-86 01:07:00 EST
References: <474@iheds.UUCP>
Distribution: net
Organization: AT&T Information Systems, Lincroft
Lines: 10
Summary: large prizes are NOT lump sums

In article <474@iheds.UUCP>, esr@iheds.UUCP (Eileen Rieback) writes:
> One company is advertising a 10 million dollar grand prize!  My question is
> this: How can a clearinghouse afford to give away prizes of such magnitude??

It's simple.  For the large prizes, they pay them over 20 years or so. They
probably buy some sort of annuity for a fraction of what the prize is worth.
Most big jackpot lotteries do the same thing.  In New Jersey, the big prize
used to be $300,000.  It's now about $2,000,000 over 20 years because of the
annuity.
  Marsh Gosnell