Excel 2000 in a Nutshell

Name

CONFIDENCE

Synopsis

Use the CONFIDENCE function to determine the confidence interval for a population mean. In other words, this function determines a margin of error for a sample mean. For example, when you hear that Californians have a mean family income of $40,000, you can use this function to determine the margin of error for the unknown population mean income.

To Calculate

=CONFIDENCE(Alpha, Standard_Dev, Size)

All three of the arguments are required for this function.

Alpha

This argument must be a decimal value between and 1 that indicates the significance level used to determine the confidence level. The confidence level is actually calculated by performing the following calculation: 100 x (1-Alpha )%. If you have a confidence level of 60% the value of Alpha would be .4.

Standard_Dev

This argument must be a positive number that indicates the population standard deviation for the data. If this is not known, you cannot use this interval, but must use a T-interval instead.

Size

This argument is a positive number that indicates the size of the sample. If the value is not an integer, the value is truncated to an integer.

Example

Figure 15-6 illustrates how CONFIDENCE is used to find the confidence interval for different populations. The confidence interval can then be added and subtracted from the sample mean to determine the actual interval. For example, the values in row 2 indicate that the confidence interval is between 33.807 (35-1.1927) and 36.193 (35 + 1.1927).

Figure 15-6. Use ...