Monte Carlo Simulation in Excel: A Practical Guide
March 25th, 2005 by JTJ

There are many things that faster computers have made possible in recent years.
For [journalists], scientists, engineers, statisticians, managers, investors, and others,
computers have made it possible to create
models that simulate reality and aid in
making predictions. One of the methods for simulating real systems is the ability to take
into account randomness by investigating hundreds of thousands of different scenarios.
The results are then compiled and used to
make decisions. This is what Monte Carlo
simulation is about.

      Monte Carlo simulation is often used in business for risk and decision analysis, to help make decisions
given uncertainties in market trends, fluctuations, and other uncertain factors…..

This article will guide you through the process of performing a Monte Carlo simulation using
Microsoft Excel. Although Excel will not always be the best place to run a scientific
simulation, the basics are easily explained with just a few simple examples.”


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