hoangvu90

Annuity due means putting in money at the beginning of the month rather than the end. It is usually explicitly stated as well

In this case. she is pulling out money starting at t=41 for 20 years so she needs to have a PV that will allows this to carry on for 20 yrs.

The PV = 981814.74 is obtained from a general annuity, despite the retiree pulling out the money at the beginning of the month, it doesn't affect her method of saving - she saved for this amount using the general annuity formula

Hope that helps