How to use LOGINV function in Excel?

The `LOGINV` function in Excel is used to calculate the inverse of the lognormal distribution. It is useful when you want to find the value, ( x ), for a given probability, mean, and standard deviation of the logarithm of ( x ).

The syntax for the `LOGINV` function is:

LOGINV(probability, mean, standard_dev)

Where:

probability: This is the probability corresponding to the lognormal distribution. It should be a value between 0 and 1.
mean: This is the mean of the natural logarithm of the distribution (often referred to as the mean of ln(x)).
standard_dev: This is the standard deviation of the natural logarithm of the distribution (the standard deviation of ln(x)).

Example

Suppose you want to use the `LOGINV` function to find a value given:

A probability of 0.9
A mean of 0
A standard deviation of 1

You would enter the following formula in an Excel cell:

=LOGINV(0.9, 0, 1)

This will return the inverse value of the lognormal distribution given the specified parameters.

Important Considerations

The `LOGINV` function assumes that the logarithm of the variable is normally distributed.
The `LOGINV` function is available in versions of Excel up to 2010. In Excel 2010 and later, the `LOGINV` function has been replaced by the `LOGNORM.INV` function, which serves the same purpose but follows more consistent naming conventions with other statistical functions.
It is often used in simulations and financial models where you need to estimate possible future outcomes based on past variance and returns data.

When using `LOGINV`, ensure your data is appropriate for a lognormal distribution and that your probability values are valid (0 < probability < 1).

facebooklinkedin