**Day 3 – Putting it in Excel**

For this lesson, we’ll put our calibrated slot machine equation into Excel and create 1,000 trial outcomes to study.

**Step 1:** Let’s revisit our equation that uses calibrated slot machines to pick numbers for the “# month rented” during the year and possible “repair costs”.

Potential Profit = [* r(8, 12)* x monthly rent] – fixed expenses –

*r(220, 800)*The r(min, max) slot machine is really known as “random between” in spreadsheet language. So we’ll write ** r(8, 12)** as RANDBETWEEN(8,12).

Note the abbreviated spelling of “random.” If you’re using Excel, they condensed it to “rand.”

**Step 2:** Let set up your spreadsheet with the following header.

Here are the details:

For A2, # months rented => RANDBETWEEN(8, 12)

For B2, Income => # months rented x $1,000/month

For C2, Fixed Costs => $750/month x 12 months

For D2, Repair Costs => RANDBETWEEN(220, 800)

For E2, Potential Profit => B2-C2-D2

**Step 3:** Breathe!!!

**Step 4:** Copy this row, A2:E2, down 1,000 times. Your last line should be at row 1001.

Notice how the “calibrated slot machine” picks different numbers for “# months rented” and “repair costs.” All these permutations help you create valid estimates without your personal biases getting in the way.

**The main point:** You’ve just created a 1,000 profit estimates; a data set large enough to use basic statistics on with credibility. That’s impressive – good job!

**In tomorrow’s lesson **I’ll show you how to work with these results so they’re easy to understand.