How to use the LOGNORMDIST function
What is the LOGNORMDIST function?
The LOGNORMDIST function calculates the cumulative lognormal distribution of argument x, based on a normally distributed ln(x) with the arguments of mean and standard_dev.
What is the lognormal distribution?
The lognormal distribution is a continuous probability distribution of a random variable whose logarithm follows a normal distribution. It is often used to model a steady relative growth rate is steady like financial returns.
What is a normally distributed ln(x)?
For a random variable x that follows a lognormal distribution like ln(x) is normally distributed. This means that if you take the natural logarithm of x the result will follow a standard normal distribution.
What is a continuous probability distribution?
A continuous probability distribution is defined over an interval and range of continuous values. This gives the probability an outcome that is exactly equal to any value, and having an area under its probability density curve equal to 1.
What is a continuous value?
A continuous value comes from a continuum of possible points rather than distinct separate values. It is able to take on any quantity within an interval rather than certain fixed outcomes.
LOGNORMDIST Function Example
Formula in cell C7:
LOGNORMDIST Function Syntax
LOGNORMDIST(x, mean, standard_dev)
LOGNORMDIST Function Arguments
| x | Required. |
| mean | Required. A value representing the mean of ln(x). |
| standard_dev | Required. A value representing the standard deviation of ln(x). |
What is the mean?
The arithmetic mean is calculated by dividing the sum of all values by the number of values.
For example, an array contains these values: 3,2,1
The sum is 3 + 2 + 1 equals 6
The number of values is 3.
6/3 equals 2. The average of 3, 2, 1 is 2
What is the standard deviation?
Standard deviation tells you how far from the average values are spread out. Both charts above have numbers and an average plotted, they share the same average however, the numbers are not the same.
Chart A above shows that the values are more spread out than the values in chart B. Chart A has a standard deviation of 23.45256334, standard deviation for chart B is 5.207075606. Standard deviation is used in statistics.
What is the cumulative distribution function?
The cumulative distribution function defines the probability that a random variable is less than or equal to a specified value. It gives the area under the probability density curve up to that value.
What is the probability density function?
A probability density function defines a continuous probability distribution by providing the relative likelihood that a random variable takes on different values. The total area under the curve over all values equal to 1.
LOGNORMDIST Function not working
The LOGNORMDIST function returns
- #VALUE! error value if any argument is non-numeric.
- #NUM! error value if:
- x <= 0
- standard_dev <= 0
How is the LOGNORMDIST Function calculated?
The equation to calculate the lognormal cumulative distribution is:
Functions in 'Compatibility' category
The LOGNORMDIST function function is one of 21 functions in the 'Compatibility' category.
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