Calculate Binomial Distribution in Excel
The BINOM.DIST function is categorized under Excel Statistical functions. It calculates the binomial distribution probability for the number of successes from a specified number of trials. This binomial distribution Excel guide will show you how to use the function, step by step.
The binomial distribution is a statistical measure that is frequently used to indicate the probability of a specific number of successes occurring from a specific number of independent trials. The two forms used are:
- The Probability Mass Function – Calculates the probability of there being exactly x successes from n independent trials
- The Cumulative Distribution Function – Calculates the probability of there being at most x successes from n independent trials
In financial analysis, the BINOM.DIST function can be useful in finding out, for example, the probability of publishing a best-selling book from a range of books to be published by a company.
Introduced in Excel 2010, BINOM.DIST function is an updated version of the BINOMDIST function.
Formula for Binomial Distribution
The BINOM.DIST uses the following arguments:
- Number_s (required argument) – This is the number of successes in trials.
- Trials (required argument) – This is the number of independent trials. It must be greater than or equal to 0.
- Probability_s (required argument) – This is the probability of success in each trial.
- Cumulative (required argument) – This is a logical value that determines the form of the function. It can either be:
- TRUE – Uses the cumulative distribution function.
- FALSE – Uses the probability mass function.
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How to use the Binomial Distribution Function in Excel?
To understand the uses of the BINOM.DIST function, let us consider an example:
Suppose we are given the following data:
The formula for calculating binomial distribution using the cumulative distribution function is shown below:
We get the result below:
The formula for calculating binomial distribution using the probability mass function is shown below:
We get the result below:
A few notes about the BINOM.DIST function
- The BINOM.DIST function will truncate all numerical values to Integer.
- #VALUE! error – Occurs when any of the arguments provided is non-numeric.
- #NUM! error – Occurs when:
- The given probability is less than zero or greater than 1.
- The given number_s is less than zero or greater than the number of trials.
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