Appendix 7.1: Normal Distribution Using Excel

Question 1

Finding Normal Probability (P(X < x) or P(X > x))

Answer 1

Enter the values in respective cells (mean, standard deviation, specific x-values).

Use the NORM.DIST function under the Statistical category in Excel.

Specify the necessary parameters (X, Mean, Standard Deviation, Cumulative).

For cumulative probabilities (P(X < x)), use NORM.DIST directly.

For upper-tail probabilities (P(X > x)), calculate 1 - NORM.DIST(x).

Question 2

Finding Normal Probability Between Two Values (P(a < X < b)):

Answer 2

Enter the values in respective cells (mean, standard deviation, specific a and b values).

Use NORM.DIST(a) and NORM.DIST(b) to find P(X < a) and P(X < b).

Subtract the smaller probability from the larger one to get the desired probability.

Question 3

Finding Inverse Normal Probability (Finding x for a given cumulative probability):

Answer 3

Enter the cumulative probability in the Probability window.

Use the NORM.INV function under the Statistical category in Excel.

Specify the parameters (Probability, Mean, Standard Deviation).

The result in the specified cell represents the corresponding x-value.