Excel For Discrete Prob. Distributions
Excel For Discrete Prob. Distributions
Of Discrete
Probability Distribution
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1. Titles:
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At A3: x
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At B3: P(x)
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At C3: Sq Deviation from Mean
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At A10: Mean =
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At A 12: Variance =
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At A 14: Standard Deviation =
Using Excel to Calculate E(x) Variance and Stand. Dev. Of Discrete
Probability Distribution
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Data Entry and Calculations:
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2. Enter from A4 - A8 x variable 0,1,2,3,4
• From B4 –B8 Probabilities 0.4,0.25,0.2,0.05,0.1
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Calculations:
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5. At B12 enter =sumproduct(highlight C4 to C8, then highlight B4 to
B8) enter
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6. At B14, enter equation =SQRT(B12)
Using Excel to Calculate Binomial Probabilities (1 of 2)
Excel’s BINOM.DIST function can be used to find
binomial probabilities
The BINOM.DIST function has the following form:
where:
x = Number of successes
n = Number of trials
p = Probability of a success
cumulative = False, if you want to determine the probability
of exactly x successes occurring
cumulative = True, if you want to determine the probability
of x or fewer successes occurring
Calculating Binomial Probabilities
Example: According to First American CoreLogic, 45% of
the mortgages in Florida were underwater during the housing collapse.
I. If we randomly select three Florida mortgages, what is the probability that exactly two of them are
underwater?
II. What is the probability of two or fewer mortgages from our sample being underwater?
Instructions:
III. Titles: At A3: n At B3: p At C3: Mean At D3: Variance At E3: Std Deviation
At A6:x At B6: P(x) At C6: Cumulative P(x)
IV. Enter Data: At A4: 3 At B4 0.45 At A7 to A10: 0 to 3
V. Enter Equations: At C4: =A4*B4 At D4: =A4*B4*(1-B4) At E4: =sqrt(D4)
VI. Enter Functions: At B7: = BINOM.DIST(A7,$A$4,$B$4,FALSE)
VII. Then, under the Cumulative P(x) column:
VIII. At C7: = BINOM.DIST(A7,$A$4,$B$4,TRUE)
Using Excel to Calculate Binomial Probabilities (2 of 2)
Example: According to First American CoreLogic, 45% of
the mortgages in Florida were underwater during the housing collapse.
1. If we randomly select three Florida mortgages, what is the probability that
exactly two of them are underwater?
2. What is the probability of two or fewer mortgages from our sample being
underwater?
Using Excel to Calculate Poisson Probabilities
The Excel POISSON.DIST function has the following
form:
where:
cumulative = False, if you want to determine the probability
of exactly x occurrences
of x or fewer occurrences
Recall the Excel Practice Test Problem: Assume that a hospital admits an average of 8 patients an hour and the distribution of arrival times
follows the Poisson distribution.
Solve the probability that in the next hour 3 or less patients arrive at the hospital
Solve the probability that in the next 2 hours exactly 8 patients arrive at the hospital
Corrector Practice
mu= 8 16
x 3 8
Solutions 0.042380112 0.011987473
Corrector
Practice
mu= 8 16
x 3 8