Extra credit LOTTERY Versus SAVING Suppose for the next five years, you do one of two things: 3. You pay $2 to play the Powerball Lottery every single day. 4. You save $2 every single day and, once per year, invest it all at 1%. Which option should you choose? Show your work and explain with math why your answer is correct. Option #1: POWERBALL Using a Lottery playslip, which you can find at any Lottery retailer, pick 5 numbers between land 69 and 1 Power Number between land 26. Pay $2 per play for each Powerball ticket. Look on the Lottery website for winning numbers and prize amounts. Match All 5 of 5 & Powerball All 5 of 5 Any 4 of 5 & Powerball Any 4 of 5 Any 3 of 5 & Powerball Any 3 of 5 Any 2 of 5 & Powerball Any 1 of 5 & Powerball None of five, only Powerball Oddsl in 292,201,338 11,688,054 913,130 36,526 14,495 580 702 Prize Amount $60,000,000 $100,000 $30,000 $500 $200 $10 $10 $5 $3 92 39 OVERALL 24.87 Option #2: You save the $2 every single day and, at the end of each year, you invest it at a 1% interest rate. Extra credit LOTTERY Versus SAVING Suppose for the next five years, you do one of two things: 3. You pay $2 to play the Powerball Lottery every single day. 4. You save $2 every single day and, once per year, invest it all at 1%. Which option should you choose? Show your work and explain with math why your answer is correct. Option #1: POWERBALL Using a Lottery playslip, which you can find at any Lottery retailer, pick 5 numbers between land 69 and 1 Power Number between land 26. Pay $2 per play for each Powerball ticket. Look on the Lottery website for winning numbers and prize amounts. Match All 5 of 5 & Powerball All 5 of 5 Any 4 of 5 & Powerball Any 4 of 5 Any 3 of 5 & Powerball Any 3 of 5 Any 2 of 5 & Powerball Any 1 of 5 & Powerball None of five, only Powerball Oddsl in 292,201,338 11,688,054 913,130 36,526 14,495 580 702 Prize Amount $60,000,000 $100,000 $30,000 $500 $200 $10 $10 $5 $3 92 39 OVERALL 24.87 Option #2: You save the $2 every single day and, at the end of each year, you invest it at a 1% interest rate