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Introduce the central limit theorem

Introduce the central limit theorem - Microsoft Excel Tutorial

From the course: Learning Excel: Data Analysis

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Introduce the central limit theorem

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- [Instructor] One of the dangers of business data analysis is making decisions too soon. The reason is that short-term results can be deceiving, but you should start to see patterns as you gather more data. One reliable principle of data analysis is the central limit theorem, which says that as the number of measurements increases, the more likely it is that your data will be distributed as you expect. As an example, let's say that your data is normally distributed and a normal distribution has an average and also a standard deviation. In this case, we're looking at a so-called normal curve with a mu or average value of 100 and a standard deviation of 20. And you can see a curve of values on this graph. And on the left, in the vertical axis, there is the probability of a specific value occurring. So you can see that the chance of getting exactly 100 is 2%. That's pretty low, but there are a lot of values clustered around it And that is where the power of the normal curve and normal…

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