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By Stephen Nelson

To describe the time it takes to complete a task, you use the exponential probability distribution, For example, you can describe the time between arrivals of vehicles in a drive-through or the time required to load a crate of goods. Product lifetimes also often follow an exponential probability distribution.

For example, if the average lifetime of a part in a machine is 15 years, you can find the probability that the part will last less than a certain number of years, more than a certain number of years, or between numbers of years.

The **EXPONDIST **function uses the following syntax:

=EXPONDIST (x, lambda, cumulative)

where lambda is the inverse of the mean and cumulative allows you to tell Excel whether you want the cumulative probability or the probability of exactly that value. For example, if you want to find the probability that a part with a mean lifetime of 12 years lasts less than 6 years, enter the function as follows:

=EXPONDIST(6,1/12,TRUE)

The function returns the value 0.3935.

**F Probability Distributions using the FDIST, FINV and FTEST Functions**

If you want to compare the variances of two normal populations using data collected from two independent random samples of size N1and N2 of these populations, it results in an F distribution with N1-1 degrees of freedom and N 2-1 degrees of freedom. (Note: The more degrees of freedom, the less the skew.)

If you know a value and want to find the probability in the F distribution, you use the FDIST function. The FDIST function uses the following syntax:

=FDIST(x, degrees of freedom 1,degrees of freedom 2)

If you know the probability and want to find a value for the F distribution, you use the FINV

function. The FINV function uses the following syntax:

=FINV (probability, degrees of freedom 1, degrees of freedom 2)

The F-test finds the one-tailed probability that the variances in two data sets are not significantly different. For example, scientists use the F-test to compare pairs of data obtained from particular laboratories, analysts, or methods to determine whether one batch is significantly more precise than the other. The FTEST function uses the following syntax:

=FTEST (array 1, array 2)

About the author: Seattle CPA Stephen L. Nelson wrote the bestselling book, MBA’s Guide to Microsoft Excel, from which this short article is adapted. Nelson also writes and edits the S Corporations Explained and LLCs Explained websites.

*Want to read more about MS Excel tips and tutorials? Visit Hot Excel.*