You are 30 years old. You have good job and are paid good salary. In addition to your employment income, you receive income from a rental home you own, and you receive interest and dividend income from bonds and stock that you own. You plan to work at your regular employment until you are 65 years of age, after which time you wish to retire.

But to assure that there will be sufficient funds available to fund your retirement when you reach your 65^th birthday, you must first determine how much income you will need available each month to replace the income that ends when you quit working. After you know how much income you will need monthly to sustain a secure retirement, you must next calculate how much you must save and invest monthly whilst you are employed.

Your income pre-retirement: $35000/a year

expense pre-retirement: $20000/a year

Your income post-retirement: $10000/a year

expense post-retirement: $12000/a year

a) How much replacement income does your household require each month you are retired? (Replacement Income required = Total monthly expenses income currently available (Rental income, dividends, social insurance. Replacement Income required is your monthly budget deficit.)

b) Using the amount of replacement income you determined your household requires monthly to meet your monthly expenses, CALCULATE the AMOUNT OF FUNDS your household must have accumulated (SAVED and INVESTED) by your 65^th birthday to FUND (pay for) your retirement until you are 90 years of age. Monthly retirement income must begin ON your 65^th birthday.

***Use a 4.50% annual rate of return (compounded monthly) as your Opportunity Cost to calculate this amount.

c) CALCULATE the Weighted Average Rate of Return you expect to earn from your long-term investments.

d) Using the Weighted-average Rate of Return you have calculated above, CALCULATE the amount of money your household must SAVE and INVEST MONTHLY to accumulate sufficient funds to retire at age 65.

NOTE: The answer don't have to be specific numbers. But please help me present the appropriate calculations!!