Why are the cash prizes different for Mega Millions and Powerball?
The cash prizes for both games are the amounts needed to fund the purchase of bonds to satisfy the respective annuity amounts for both games. The annuity for Powerball, however, is a graduated annuity; payments in that annuity increase over time, and the overall length of the annuity payout period is longer. Mega Millions annuity payments are the same from year to year, which requires the use of a different type of annuity than what Powerball uses. You see a difference in the cash payouts because the bonds to fund each of these different types of annuities have different costs.
