How the Powerball Jackpot Is Calculated and Why It Grows

The Powerball jackpot starts at a guaranteed $20 million (annuity) and grows every time a drawing passes without a jackpot winner. How fast it grows depends mainly on two things, according to Powerball: how many tickets are sold, and the "annuity factor," which is driven by interest rates. The advertised number is an estimate of a 30-payment annuity. The cash option, the amount actually in the jackpot pool, is always smaller.

This guide walks through each piece, with worked examples, so the next time you see a jackpot sign you'll know what the number actually means.

The starting point: $20 million

When someone wins the jackpot, the next drawing's jackpot resets to a guaranteed $20 million annuity. Powerball announced this starting amount in March 2020, along with minimum increases of $2 million between drawings when the jackpot rolls (Powerball announcement). Resets to $20 million have continued in 2026.

So right after a win, you'll typically see something like $20 million, then at least $22 million, then at least $24 million, and so on. In practice, increases get much bigger than $2 million once sales pick up, as we'll see.

To put the floor in perspective: Powerball draws three times a week, so a run of 10 rollovers takes a little over three weeks. If every one of those drawings grew by only the $2 million minimum, the jackpot would reach $40 million. A run of 30 rollovers, about ten weeks, would reach at least $80 million. Real runs usually move faster than this, because sales rise as the number on the sign grows, but the minimum guarantees the jackpot never stalls between drawings.

What the advertised jackpot actually is

The big number on the billboard is the estimated annuity jackpot: the total, before taxes, of all the payments a single winner would get by choosing the annuity. According to the official Powerball FAQs, the annuity is one immediate payment followed by 29 annual payments, each 5% larger than the one before: 30 payments over 29 years.

The cash value is, in Powerball's words, generally the amount of money that needs to be in the jackpot prize pool on drawing day to fund that annuity. Choose cash and you get that pool as a lump sum. Choose the annuity and the pool is used to buy securities that pay out the 30 installments.

Both figures are estimates until ticket sales for the drawing are final, and for the annuity, until the Multi-State Lottery Association takes bids on the securities that will fund it.

Worked example: a $100 million annuity, payment by payment

Because each payment is 5% larger than the last, the 30 payments add up to 66.44 times the first one. (That's 1 + 1.05 + 1.05² + … + 1.05²⁹.) So for a hypothetical $100 million advertised jackpot:

First payment = $100,000,000 ÷ 66.44 ≈ $1.51 million

Each later payment is 5% bigger:

The final payment is about four times the first. The first 10 payments add up to only about $18.9 million of the $100 million, because the payments are back-loaded. Every payment is taxable when received; see our Powerball taxes guide.

Scaling up: a $500 million jackpot

The same 5% schedule applies at any size. Here is the full payment schedule for a hypothetical $500 million advertised jackpot taken as an annuity by a single winner.

Payment

Loading chart…

Illustration: one immediate payment plus 29 annual payments, each 5% larger than the last, summing to the advertised jackpot. Actual amounts depend on the jackpot and are taxed.

View data table (30 rows)

	Payment
Year 1	$7.5M
Year 2	$7.9M
Year 3	$8.3M
Year 4	$8.7M
Year 5	$9.1M
Year 6	$9.6M
Year 7	$10.1M
Year 8	$10.6M
Year 9	$11.1M
Year 10	$11.7M
Year 11	$12.3M
Year 12	$12.9M
Year 13	$13.5M
Year 14	$14.2M
Year 15	$14.9M
Year 16	$15.6M
Year 17	$16.4M
Year 18	$17.2M
Year 19	$18.1M
Year 20	$19.0M
Year 21	$20.0M
Year 22	$21.0M
Year 23	$22.0M
Year 24	$23.1M
Year 25	$24.3M
Year 26	$25.5M
Year 27	$26.8M
Year 28	$28.1M
Year 29	$29.5M
Year 30	$31.0M

Chart: TradingView Lightweight Charts™ · Data & analysis: TodayPowerball

The first payment is about $7.5 million and the 30th is about $31 million, again roughly four times larger. The bars climb steadily because each one is 5% bigger than the last, not because anything about the jackpot changes over time. Two things the chart doesn't show: taxes, which apply to each payment in the year it arrives (at the 37% top federal rate alone, the first payment would shrink to roughly $4.7 million before any state tax), and the cash option, which would be one much smaller lump sum paid right away.

Why interest rates change the advertised jackpot

This is the part that surprises most people. Powerball itself says that the higher the interest rates, the higher the advertised Grand Prize.

Here's why. The cash in the jackpot pool is what actually exists. The advertised annuity is how much that cash can grow into when it's invested in securities that pay out over 29 years. When interest rates are high, the same pool of cash buys a bigger stream of future payments, so the advertised annuity is bigger. When rates are low, the same cash supports a smaller annuity.

That's also why the gap between the cash value and the advertised jackpot isn't fixed. As one real example, Powerball's March 2020 announcement listed an advertised jackpot of $150 million with a cash value of $114.8 million, about 77%. The ratio at any given time depends on the interest-rate environment then, so don't assume it holds today. Check the cash value posted for each drawing.

What the record jackpots show

You can see this effect in real jackpots. The chart below shows each of the 15 largest Powerball jackpots' cash value as a percentage of its advertised annuity, in date order.

Cash value ÷ advertised annuity

Loading chart…

Source: advertised and cash values from Powerball's media center and announcements; percentages calculated by TodayPowerball. A lower share means the same cash supported a bigger advertised annuity.

View data table (15 rows)

	Cash value ÷ advertised annuity
Jan 2016	62%
Aug 2017	63.3%
Oct 2018	57.6%
Mar 2019	62.1%
Jan 2021	74.8%
Oct 2021	70.9%
Nov 2022	48.9%
Feb 2023	54%
Jul 2023	51.7%
Oct 2023	43.9%
Jan 2024	50.5%
Apr 2024	46.8%
Sep 2025	45.9%
Dec 2025	45.9%
Aug 2026	43.3%

Chart: TradingView Lightweight Charts™ · Data & analysis: TodayPowerball

The cash share was about 71% to 75% for the two big jackpots of 2021, when interest rates were very low, and has been between about 43% and 54% for every jackpot on the list since early 2023, after rates rose. For example, the $1.04 billion jackpot won in Illinois on August 12, 2026 had a cash value of $450.5 million, about 43%. The chart shows what happened for these particular jackpots; it doesn't predict the ratio for the next one, which depends on rates at that time. That's why the posted cash value for each drawing matters more than any rule of thumb.

If you're weighing the two options, our guide to lump sum vs. annuity goes deeper.

How ticket sales drive growth

Not every dollar of a ticket goes to prizes. According to the official Powerball FAQs, on average 35% of each $2 ticket stays in the jurisdiction where it was sold to fund public programs. The rest pays for prizes, including the jackpot pool, and the other costs of the game.

Every Powerball ticket sold contributes to the jackpot pool, so the jackpot's growth between drawings is mostly a function of how many tickets were sold for the drawing that didn't produce a winner. Powerball names a few factors that move sales:

• Day of the week. Saturday drawings traditionally sell more than Wednesday drawings.
• Seasonality. Sales vary through the year.
• Competition. A large Mega Millions jackpot can draw players away.
• The jackpot itself. Bigger jackpots bring out far more occasional players, and that's the biggest factor of all.

New in 2026: UK ticket sales

Powerball says that beginning July 21, 2026, tickets sold in the United Kingdom feed the same jackpot pool. Each UK play contributes the same fixed U.S. dollar amount to the jackpot as a U.S. play. Ticket price, odds and lower-tier prizes don't change for U.S. players, but more contributions mean the jackpot is expected to grow faster. UK winners are paid over 30 years with no cash option, and if U.S. and UK tickets both win the same drawing, the jackpot's cash value is split equally among all winning tickets.

The rollover snowball

Rollovers create a feedback loop: no winner → bigger jackpot → more tickets sold → bigger increase for the next drawing. That's why the jackpot can crawl up by a few million dollars per drawing early in a run and then jump by tens of millions near the top.

But more tickets also make it more likely that someone wins. Here's a simple illustration. If plays are spread randomly across all 292,201,338 combinations, the chance that nobody hits the jackpot is about e^(−plays ÷ 292,201,338):

These sales levels are illustrations, not actual Powerball figures, and real-world number picking isn't perfectly random. The pattern is the point. With modest sales, the jackpot almost always rolls. As it climbs, sales surge and the odds that the run ends in each drawing grow quickly. That combination of fast growth and a rising chance of a winner is why record runs eventually end. You can read about the largest ones in our list of the biggest Powerball jackpots.

Common misunderstandings about jackpot growth

• "The jackpot is the cash in the pool." It isn't. The advertised number is the annuity total; the cash in the pool is the cash value, often well under half of the headline in recent years.
• "It always grows by the same amount." The $2 million minimum is a floor. Actual increases depend on sales and can be many times larger near the top of a run.
• "A long run means someone is due to win." Every drawing is independent. The chance of a winner rises in big drawings because more plays are sold, not because the run has been long.
• "The estimate is final." Both the annuity and cash figures are estimates until sales are final, and Powerball can update them before the drawing.
• "UK sales change my odds." They don't. Powerball says UK tickets feed the same jackpot pool but don't change U.S. prices, odds or lower-tier prizes. They can make it more likely that the jackpot is shared.

When the jackpot is won

If there's one jackpot-winning ticket, that winner takes the whole prize. If there are several, the jackpot is divided equally among them (pari-mutuel), and each winner separately chooses the annuity or cash, where cash is offered. Then the cycle starts over at $20 million for the next drawing.

None of this changes your odds. Whether the jackpot is $20 million or $2 billion, the chance of matching all six numbers is 1 in 292,201,338 per play. A bigger jackpot changes what you'd win and how likely you are to share it, which is exactly the trade-off our Powerball expected value guide works through.

Frequently asked questions

What is the starting Powerball jackpot?

$20 million (annuity), guaranteed, after each jackpot win. Powerball also set minimum increases of $2 million between drawings.

Why is the cash value so much lower than the advertised jackpot?

The advertised jackpot is the total of 30 annual payments over 29 years, made possible by investing the cash in the pool. The cash value is the money in the pool today. The gap depends mainly on interest rates.

Why did the jackpot jump so much between two drawings?

The increase depends on how many tickets were sold. Large jackpots and Saturday drawings tend to sell more, so the jackpot grows faster. The advertised figure is also an estimate and can be updated as sales come in.

Does a bigger jackpot mean better odds?

No. The odds are fixed at 1 in 292,201,338 per play. A bigger jackpot means more players, which makes it more likely that the jackpot will be won (and shared) by someone.

How much of the advertised jackpot is cash?

It varies with interest rates. Among Powerball's 15 largest jackpots, the cash value ranged from about 43% to about 75% of the advertised annuity, and every one since early 2023 has been at about 54% or less. Check the cash value posted for each drawing.

Where does the rest of my $2 go?

According to Powerball, on average 35% of each $2 ticket stays in the selling jurisdiction for public programs. The rest pays for prizes and the other costs of the game.

How is the annuity paid?

One payment right away, then 29 yearly payments, each 5% larger than the previous one. If a winner dies before all payments are made, Powerball says the remaining payments go to the winner's estate.

The bottom line

The Powerball jackpot starts at $20 million and grows with every drawing that has no winner. Ticket sales determine how fast it grows, interest rates determine how big the advertised annuity is compared with the cash in the pool, and the snowball of rising sales eventually makes a winner very likely. Whatever the number, the odds stay the same, so set a budget you're comfortable with. You must be 18 or older to play (older in some states), and help is available at 1-800-MY-RESET (1-800-697-3738).