How to Use the NORMSDIST Function in Excel

Today, we will explore the NORMSDIST function in Excel and Google Sheets. This function calculates the standard normal cumulative distribution function for a specified value, essentially providing the probability that a value drawn from a standard normal distribution is less than or equal to that specified value.

Basic Syntax

The syntax for the NORMSDIST function is as follows:

=NORMSDIST(z)

• z: The value for which you want to determine the probability in the standard normal distribution.

Example 1: Calculating Standard Normal Distribution Probability

Consider a scenario where you need to find the probability that a variable, which is part of a standard normal distribution, is less than or equal to 1.5.

In this example, entering =NORMSDIST(1.5) into a cell returns the probability of a randomly selected value from a standard normal distribution being less than or equal to 1.5.

Example 2: Using NORMSDIST for Z-test

The NORMSDIST function is also commonly applied in hypothesis testing, such as during a Z-test to compare a sample mean against a population mean. Here’s how you can use the function in this context:

Assume you have the following parameters: a sample mean of 72, a population mean of 70, a standard deviation of 5, and a sample size of 30. You wish to test if the sample mean significantly differs from the population mean with a 5% level of significance.

First, calculate the Z-score:

= (sample mean - population mean) / (standard deviation / SQRT(sample size))

Next, determine the critical Z-value with the NORMSDIST function:

= 1 - NORMSDIST(ABS(Z-score))

If the Z-value computed exceeds the critical Z-value, the null hypothesis can be rejected.

These examples illustrate how the NORMSDIST function can be utilized in Excel and Google Sheets for various statistical calculations and analyses.

More information: https://support.microsoft.com/en-us/office/normsdist-function-463369ea-0345-445d-802a-4ff0d6ce7cac