Re-design the spreadsheet model to incorporate the random variability of the annual salary growth rate and the annual portfolio growth rate into a simulation model. Assume that Tom is willing to use the annual investment rate that predicted a 20-year $1,000,000 portfolio from your answer to part a above. Run the simulation model 1000 times and determine the mean and standard deviation of the 20-year result. The question to part A is Without considering random variability, extend the current worksheet to 20 years. Confirm that by using the constant annual salary growth rate and the constant annual portfolio growth rate Tom can expect to have a 20-year portfolio of $772,722. What would Toms annual investment rate have to be in order for his portfolio to reach a 20-year goal of $1,000,000? The answer to this question is 9.13%.

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