How to use the LOGNORM.INV function in Excel

In this article, we will learn How to use the LOGNORM.INV function in Excel.

What is the lognormal distribution function and inverse of lognormal distribution function ?

In Statistics, a log-normal (or lognormal) distribution is a continuous probability distribution of a random variable whose logarithm is normally distributed. A random variable which is log-normally distributed takes only positive real values. It is a convenient and useful model for measurements in exact and engineering sciences as well as medicine, economics and other fields, e.g. for energies, concentrations, lengths, financial returns and other amounts. So if the data has x1,x2, x3, ...etc values, then the lognormal distribution has ln(x1), ln(x2), ln(x3), ...etc values. Now our new random variable becomes new x1, new x2,..


So inversely we can say x1 = e^(new x1) as shown below,

Here 

e is Euler's number ( value of e = 2.71828...).

Lognormal distribution is often applicable in time to repair equipment, time to fatigue failure or economic data, basically saying while getting the idea for maintenance things or values. Mathematically, we can calculate the probability for lognormal distribution function using the formula stated below.

Here

e is Euler's number ( value of e = 2.71828...).

x value at which inverse of lognormal distribution is evaluated

x , mean , std  is the value, mean and standard deviation for the normal distribution

x' , mean', std' is the value, mean and standard deviation for the lognormal distribution.

We calculate the probability value for x value using the LOGNORM.DIST function. But if you want to find out the value x from the lognormal probability value using the mean and standard deviation.

This formulation seems complex to formulate in Excel. So Excel provides a built-in statistical LOGNORM.INV function to work as an inverse of lognormal distribution calculator. 

 

LOGNORM.INV Function in Excel

LOGNORM.INV function built in statistical function returns the x value for the probability of lognormal distribution. It takes the 3 arguments. Let's understand these arguments one by one listed below with the function syntax.

LOGNORM.INV Function syntax:

=LOGNORM.INV(probability, mean, std_dev)

probability : probability value for the distribution 

mean : mean of inverse for lognormal distribution

std_dev : standard deviation for inverse of lognormal distribution

 

Example :

All of these might be confusing to understand. Let's understand how to use the function using an example. Here we have probability value, mean value and standard deviation value. We need to calculate the x value for the inverse of lognormal distribution function.

Use the formula:

=LOGNORM.INV ( B3, B4, B5 )

The x value for the lognormal distribution comes out 4for the value probability value 0.039 or 3.9% with mean 3.5 and standard deviation 1.2.

You can perform the inverse of this function i.e. you can find the probability value using the x value, mean value and standard deviation value for the lognormal distribution using the LOGNORM.DIST function. Use the cumulative argument as TRUE to get the x value value.

Here are all the observational notes using the LOGNORM.INV function in Excel
Notes :

  1. The function only works with numbers. If any argument other than cumulative is non numeric, the function returns #VALUE! error.
  2. The function returns #NUM! Error.
    1. If argument prob < 0 or > 1
    2. If argument mean <= 0
    3. If argument std_dev < 0
  3. Value in decimal and value in percentage id the same value in Excel. Convert the value to percentage, if required.
  4. You can feed the arguments to the function directly or using the cell reference as explained in the example.

Hope this article about How to use the LOGNORM.INV function in Excel is explanatory. Find more articles on statistical formulas and related Excel functions here. If you liked our blogs, share it with your friends on Facebook. And also you can follow us on Twitter and Facebook. We would love to hear from you, do let us know how we can improve, complement or innovate our work and make it better for you. Write to us at info@exceltip.com.

 

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