Normal Approximation to the Binomial
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- Normal distribution can be used to approximate the binomial distribution.
- What is probability that you would get 8 heads out of 10 flips?
The binomial distribution:
μ = Nπ = (10)(0.5) = 5 σ2 = Nπ(1-π)= (10)(0.5)(0.5) = 2 σ = 1.5811
- Lets round off and consider any value from 7.5 to 8.5 to represent an outcome of 8 head
- We calculate the area under normal curve from 7.5 to 8.5 obtaining 8 heads.
First we compute the area below 8.5, then subtract the area below 7.5.
The results of using the normal area calculator to find the area below 8.5 and 7.5 are shown below.
- The differences between the areas is 0.044 which is the approximation of the binomial probability.
- For these parameters, the approximation is very accurate.
- The accuracy of the approximation depends on the values of N and π
- A rule of thumb is that the approximation is good if both Nπ and N(1-π) are both greater than 10.
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