SHOW EXCEL/SHEETS FORMULA AND WORK. In this assignment, you will use a Monte Carlo simulatica to investigate the effect of randomness in returns on an individual's future retirement wealth.Saving for RetirementAssume an investor begins saving for retirement at age 25 and retires at age 65. Each year, she contributes $10,000 to her retirement account. To keep things simple, assume that there are 40 annual contributions that occur on the investor's 25-th,26-th,-64-th birthdays, and that the final retirement wealth is determined on the irvestor's 65-th birthday. ?2 Savings are invested as follows: 50% in a broad stock market index and 50% in T-Bills.Your task is to compute the accumulated real retirement savings at age 65 for different return realizations. As explained below, you will generate returns waing a Monte Carlo simulation. On Camme, you ear find an Proct file containing Mistorical net refurnorce It. St.P 500 and 3-modth T-bills, as well as the consumer price index (CPI) from 1926 to 2017. The retarn on the CPI serves as a measure of inflation.STEPG.Compute the annual real return on the 5050 portsolio for each year in the sample. The resulting set of 92 portfolio returns represents the empirical distribution. These are the over this time period.We will use the historical data to surces what may happen in the fature via a Monte Carlo simulation. To generate a possible path of future returns, draw 40 times with replacement from the empirical distribution. ?2 Assuming the 92 listorical retarms are located in the cell range H12H103, a random draw can be generated with-THOTS (1112 IH 09, EAMTITINTER (1,927)The net of 40 druns yos groersted can be viewed as cen screwis of what may happen in the next 40 ywars.Uning the similated return path, compate the imotary scallh at wor 65.Repeat steps two and three 1,000 times. The most efficient way of doing so in Excel is to use a data table. An example of this was illustrated in Lecture 2.UESTIONS:Report the mean and standard deviation of the portfolio returns computed in step one.Report the mean, standard deviation, 25th and 75th percentiles, minimum, maximum as well as a histogram of the 1,000 values you generated for the retirement savings at age 65. Interpret each of these statistics, i.e. explain in words what they tell you in the context of the example.Assuming a 5050 mix of both assets, what amount would the imvestor need to save annually such that her retirement savings are at least $1m with a probability of 75%?[Hint: (1) To find this number, create an imput cell for the annual samings and use trial-and-error to determine the ropuired amount. (2) The number you find oull only be approximate because of simulation noise - that is ok!(S) Goal-sert or solver will not work in this content./Assuming annual savings of $10,000, what mix of the two awets emsures that the investor's savings amount to $1.5m on average? How do the standard deviation and the minimum savings change in this case relative to the baseline scenario of a 5050 mix? [Hint.(1) To determine the required amount. (2) The number you find will only le spproximate because of simulation noise - that is okt. (9) Goal-serk or solver will not wort in this contert. /