LIR 493: Quantitative Methods Professor Wallace Hendricks

confidence intervalS IN EXCEL

population Variance Known (Using the Z formula)

The function CONFIDENCE returns ½ of the total confidence interval. You want

CONFIDENCE

CONFIDENCE where yields a (1-)*100% C.I. yields a 95% C.I. with 2.5% in each tail. = population standard deviation ; n = size

population Variance Unknown (Using the t-statistic)

EXCEL will not compute the C.I. directly. You must enter the equation. The C.I. is

1. Compute the standard deviation in the sample using STDEV().
2. Compute the standard error = STDEV()/SQRT(n)
3. Find the t-statistic using TINV
   t = TINV(,n-1)
4. Compute the C.I. as
   * standard error