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Statistical Analysis Using Excel Lesson 3: Binomial Distribution

Introduction
In Lesson 3 you will learn the statistical technique for Binomial Distributions. Binomial Distribution When a coin is flipped, the outcome is either a head or a tail; when a magician guesses the card selected from a deck, the magician can either be correct or incorrect; when a baby is born, the baby is either born in the month of March or is not. In each of these examples, an event has two mutually exclusive possible outcomes. For convenience, one of the outcomes can be labeled "success" and the other outcome "failure." If an event occurs N times (for example, a coin is flipped N times), then the binomial distribution can be used to determine the probability of obtaining exactly r successes in the N outcomes. The binomial probability for obtaining r successes in N trials is:

P (r) =

N! r! (N - r) !

(1

) N-r

where P(r) is the probability of exactly r successes, N is the number of events, and is the probability of success on any one trial. This formula for the binomial distribution assumes that the events: 1. are dichotomous (fall into only two categories) 2. are mutually exclusive 3. are independent and 4. are randomly selected Consider this simple application of the binomial distribution: What is the probability of obtaining exactly 3 heads if a fair coin is flipped 6 times? For this problem, N = 6, r = 3, and = 0.5. Therefore,

P (3) =

6! (0.5) 3 (1 0.5) 6 - 3 3! (6 - 3) ! = 6 x 5 x 4 x 3 x 2 (0.125) (0.125) = 0.3125 (3 x 2) (3 x 2)

Often the cumulative form of the binomial distribution is used. To determine the probability of obtaining 3 or more successes with n=6 and = 0.3, you compute P(3) + P(4) + P(5) + P(6). This can also be written as:

/ P (r )
i i=3

and is equal to 0.1852 + 0.0595 + 0.0102 + 0.0007 = 0.2556. The binomial distribution can be approximated by a normal distribution (click here to see how). Click here for an interactive demonstration of the normal approximation to the binomial. Binomial Distribution Function To open and save a workbook for this Lesson: Step 1 Step 2 Step 3 Step 4 Start Open Save Click Excel, if necessary the Binomial Distribution Lesson Data File the workbook as Binomial Distribution Function the Binomial Distribution sheet tab, if necessary

The initial segment of the Binomial Distribution worksheet on your screen should look like FIGURE 3-1.

FIGURE 3-1 Binomial Distribution Worksheet Suppose you want to know the probability of obtaining exactly 3 heads if a fair coin is flipped 6 times. To determine this probability: Step 1 Step 2 Activate Cell B9 Type =BINOMDIST(

Your Binomial Distribution worksheet should look like Figure 3-2.

FIGURE 3-2 Binomial Distribution Worksheet Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Click Type Click Type Click Type Type Doubleclick cell B3 , cell B5 , cell B7 , F FALSE in the functions option list

FALSE indicates to Excel that the probability for the exact number of successes (in this example exactly 3 of the 6 trials are successful) is calculated. Your Binomial Distribution worksheet should look like Figure 3-3.

FIGURE 3-3 Binomial Distribution Worksheet Step 11 Press the ENTER key to add the closing parenthesis and enter the formula into the cell

The exact probability of obtaining 3 heads if a fair coin is tossed 6 times 0.3125 is calculated and your Binomial Distribution worksheet should look like Figure 3-4.

FIGURE 3-4 Binomial Distribution Worksheet Suppose you want to determine the probability of at most 3 heads occurs when there are 6 tosses of a fair coin. In this situation you include the TRUE function instead of the FALSE function in the BINOMDIST function. To illustrate the above: Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Activate Type Click Type Click Type Click Type Type Doubleclick cell B11 =BINOMDIST( cell B3 , cell B5 , cell B7 , TR TRUE in the functions option list

Your Binomial Distribution worksheet should look like Figure 3-5.

FIGURE 3-5 Binomial Distribution Worksheet Step 11 Press the ENTER key to add the closing parenthesis and enter the formula into the cell

The probability of obtaining at most 3 heads if a fair coin is tossed 6 times 0.65625 is calculated and your Binomial Distribution worksheet should look like Figure 3-6.

FIGURE 3-6 Binomial Distribution Worksheet 7

For you to determine the probability of obtaining at least 4 or more successes in 6 tosses of a fair coin, you can determine the probability for 4, 5, and 6 successes and then add them together. To illustrate the above, you must compute the above probabilities. To calculate the probability of having exactly 4 successes in 6 tosses of a fair coin: Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Step 9 Step 10 Activate Type Click Type Click Type Click Type Type Doubleclick cell B20 =BINOMDIST( cell B16 , cell B5 , cell B7 , F FALSE in the functions option list

Your Binomial Distribution worksheet should look like Figure 3-7.

FIGURE 3-7 Binomial Distribution Worksheet Step 11 Press the ENTER key to add the closing parenthesis and enter the formula into the cell

The probability of obtaining exactly 4 heads if a fair coin is tossed 6 times 0.234375 is calculated and your Binomial Distribution worksheet should look like Figure 3-8.

FIGURE 3-8 Binomial Distribution Worksheet To calculate the probability of obtaining exactly 5 successes in 6 tosses of a fair coin: Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 Activate Type Click Type Click Type Click Type cell B22 =BINOMDIST( cell B17 , cell B5 , cell B7 , 10

Step 9 Type F Step 10 Double- FALSE in the functions option list click Your Binomial Distribution worksheet should look like Figure 3-9.

FIGURE 3-9 Binomial Distribution Worksheet Step 11 Press the ENTER key to add the closing parenthesis and enter the formula into the cell

The probability of obtaining exactly 5 heads if a fair coin is tossed 6 times 0.09375 is calculated and your Binomial Distribution worksheet should look like Figure 3-10.

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FIGURE 3-10 Binomial Distribution Worksheet To calculate the probability of having exactly 6 successes in 6 tosses of a fair coin: Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Activate Type Click Type Click Type Click cell B24 =BINOMDIST( cell B18 , cell B5 , cell B7 12

Step 8 Type , Step 9 Type F Step 10 Double- FALSE in the functions option list click Your Binomial Distribution worksheet should look like Figure 3-11.

FIGURE 3-11 Binomial Distribution Worksheet Step 11 Press the ENTER key to add the closing parenthesis and enter the formula into the cell

The probability of obtaining exactly 6 heads if a fair coin is tossed 6 times 0.015625 is calculated and your Binomial Distribution worksheet should look like Figure 3-12.

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FIGURE 3-12 Binomial Distribution Worksheet To complete the determination of the probability of obtaining at least 4 or more successes in 6 tosses of a fair coin:

Step 1 Step 2

Activate cell B26 Type =SUM(B20:B24

Your Binomial Distribution worksheet should look like Figure 3-13. 14

FIGURE 3-13 Binomial Distribution Worksheet

Step 3

Press

the ENTER key to add the closing parenthesis and enter the formula into the cell 15

The probability of obtaining at least 4 heads if a fair coin is tossed 6 times 0.34375 is calculated and your Binomial Distribution worksheet should look like Figure 3-14.

FIGURE 3-14 Binomial Distribution Worksheet An alternative way to determine the probability of obtaining at least 4 heads if a fair coin is tossed 6 times is to subtract the probability of obtaining at most 3 heads from 1.0. In the above example, if you subtract 0.65625 (the probability of 16

obtaining at most 3 heads that appears in cell B11) from 1, the result is 0.34375 that also appears in cell B26 and is the probability of obtaining at least 4 heads if a fair coin is tossed 6 times.

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