http://www.mountaingoatsoftware.com/tools/velocity-range-calculator

To predict how much work a team will complete during
a planned number of upcoming iterations, we are better
off considering velocity as a range rather than a
specific value. That is, rather than saying “our
average historical velocity is 17,” it is better to
say something like, “Based on historical data, we
are 90% confident that velocity for the remaining
iterations on this project will be somewhere
between 13 and 19.”

To calculate a range around your velocity, you need
data for at least five iterations. Enter them in the
field at right in any order (lowest to highest,
random, most recent first, etc.). You can
optionally indicate how many iterations remain in
the project. This number will be used to tell you
how much work can likely be completed in that time.

The velocity confidence interval calculator works by calculating a
confidence interval around the median using the Binomial distribution.
In this technique, velocity values are sorted from lowest to highest.
Based on the number of observed velocities provided, some of the lowest
and highest values (the most extreme outliers) are discarded. With five
velocity observations, all five are used to determine a 90% confidence
interval. With eight observations, however, we can discard the lowest
and highest and still be 90% confident that true velocity lies between
the second highest and seventh highest values.

Assuming n observations, the formula for calculating a 90% confidence
is given by

j = n/2 – 1.96 (n*0.25)^0.5

k = n/2 + 1.96 (n*0.25)^0.5

where j and k represent the velocity observations to use. Round results
up to the next highest value.