Powerball is a lottery in the US that is available in most states. Tickets cost $2. There are a few different ways to win.

The Grand Prize payout odds are 1 in 292.201,338

The odd of winning a $1,000,000 payout are 1 in 11,688,053

The current Grand Prize $65,000,000 paid as annuity described below or an upfront cash payout of $33,700,000

The annuity option is paid out in 30 installments. The first payment is immediate and then annual payment thereafter for 29 more payments. The payments increase by 5% each year.

Your assignment is to:

Calculate the increasing annuity payments using the Grand Prize of $65,000,000

Calculate the breakeven discount rate that would make you indifferent between the annuity and the upfront cash value option

Calculate the expected value of a $2 ticket for the drawing with the payout describe above.

Calculate the Grand Prize amount that creates an expected value of $2 for a purchased ticket.

Create all of this in an Excel spreadsheet.