What is Confidence Interval in Excel?
Confidence Interval in excel is the range of population values that our true values lie in. This takes the CONFIDENCE value which is centered around the population mean of the range of values. So, by calculating the CONFIDENCE value, we can easily construct the confidence interval value around the average mean of the sample values.
CONFIDENCE is a statistical function in excel that uses the mean value of the sample data, a standard deviation of the sample, and the number of samples to calculate the confidence value to construct confidence interval value.
Below is the syntax of the CONFIDENCE function.
- Alpha: This is the sign which is at 1 confidence level; if 90% is the confidence level, then significance level 0.10.
- Standard Deviation: This is the SD of the data range.
- Size: The number of observations in the data set.
To compare the confidence interval value, we need to further calculate the mean of the data set. We will see some of the examples to understand practically.
How to Calculate & Find Confidence Interval in Excel?
Below is an example of calculating the confidence interval in excel.
One of the food delivery company conducted a survey on delivering the food to the customer on numerous occasions, and they have recorded the time taken each time to deliver the food to the customer.
Below is the sample data of the same.
From the above data, we need to solve the confidence interval time to deliver the food quickly.
Follow the below steps to calculate the confidence value.
- Copy the above data to the excel worksheet first.
- From the above data, we need to calculate certain values that are essential for the CONFIDENCE function in excel. So, the first thing we need to calculate is the MEAN value. So to calculate the mean value using the AVERAGE in excel function.
So, the average time is taken to deliver the food on 10 occasions in 52 Minutes.
- Calculate Standard Deviation of the data set by using the STDEV.P function.
- Now, we need to note down what is the confidence level of the food delivery company to commit themselves to deliver the food quickly. Letu2019s says they are committing at a 95% confidence level; then, we need to calculate the significance value.
Significance value will be 1 u2013 Confidence Value = 5% i.e. 0.05
- The finalu00a0part we need to note down is what is the number of occasions the experiment has been conducted, in this case, ten times.
Using these values, we will calculate the CONFIDENCE value.
- Open CONFIDENCE function in E6 cell.
- The first argument of this function is Alpha i.e., what is the significance value. So our significance value is 0.05, which is there in cell E4.
- Next up is the u201cStandard Deviationu201d of the sample data. We have already calculated this SD in cell E3, so give the cell reference.
- Final argument of the CONFIDENCE function is u201cSize,u201d i.e., the number of experiments conducted, so give cell referenceCell ReferenceCell reference in excel is referring the other cells to a cell to use its values or properties. For instance, if we have data in cell A2 and want to use that in cell A1, use =A2 in cell A1, and this will copy the A2 value in A1. as E5 cell.
- Ok, thatu2019s all. Close the bracket and hit the enter key to get the confidence value.
So, the confidence value of the data series is 8.30; using this, we can construct a confidence interval value.
Confidence Interval value is arrived by adding and subtracting the confidence value from the MEAN of the data set.
So, Confidence Interval (CI) = MEAN ± Confidence Value.
- CI = 52 ± 8.30
- CI = 52 + 8.30 or 52 – 8.30
- CI = 44.10 to 60.70.
Things to Remember Here
- Confidence Interval in Excel is the plus or minus value of the average of the data set and the confidence value.
- The confidence function accepts only numerical values.
- In recent versions, CONFIDENCE function in excel is upgraded to CONFIDENCE.NORM & CONFIDENCE.T functions.
This has been a guide to Confidence Interval In Excel. Here we discuss how to calculate confidence interval value in excel using the confidence function with examples and downloadable excel templates. You may also look at these useful functions in excel –