CONFIDENCE.T Function in Excel returns the value that you can use to construct the confidence interval for a population mean. CONFIDENCE.T Function uses Student’s T-Distribution to calculate a confidence value.
Syntax of CONFIDENCE.T Function in Excel:
where the arguments are as follows:
- alpha – probability value between 0 and 1, it is also known as significance level (= 1 – confidence level). Usually alpha will be 0.05 which equates to a confidence level of 95%.
- standard_dev – The standard deviation of the population.
- size – The population sample size.
The output value of CONFIDENCE.T function i.e. confidence value should be added to and subtracted from the sample mean to calculate the confidence interval.
Confidence Interval = Sample Mean ± CONFIDENCE Value
Example of CONFIDENCE.T Function in Excel:
- Confidence value is calculated by passing alpha, standard deviation and population size to the CONFIDENCE.T Function in Excel as shown in First example.
- Sample mean is calculated in the second row.
Now we need have mean and confidence value. So we need to calculate the confidence interval using formula
- Sample mean+ confidence value is called upper bound of confidence interval. Which is calculated in Third row as shown above
- Sample mean – confidence value is called lower bound of confidence interval Which is calculated in Fourth row as shown above
So the result will be
95 % confidence interval of sample mean for the above set of values is 55.6667± 5.5429 which ranges from 50.1237 to 61.2096.