1. **Problem Statement:**
We want to approximate a binomial distribution $S_n \sim \text{Bin}(n, p)$ using a normal distribution when $n$ is large.
2. **Theorem Used:**
The DeMoivre-Laplace Limit Theorem states that for $p \in [0,1]$ and $S_n \sim \text{Bin}(n, p)$,
$$\lim_{n \to \infty} \Pr\left\{ a \leq \frac{S_n - np}{\sqrt{np(1-p)}} \leq b \right\} = \Phi(b) - \Phi(a),$$
where $\Phi$ is the cumulative distribution function (CDF) of the standard normal distribution.
3. **Key Idea:**
The binomial distribution can be approximated by a normal distribution with mean $\mu = np$ and variance $\sigma^2 = np(1-p)$ when $np(1-p) \geq 10$.
4. **Approximation Formula:**
$$S_n \approx N\left(np, np(1-p)\right).$$
5. **Important Rules:**
- Use the continuity correction when approximating discrete binomial probabilities by continuous normal probabilities. For example,
$$\Pr(S_n \leq k) \approx \Pr\left(Z \leq \frac{k + 0.5 - np}{\sqrt{np(1-p)}}\right),$$
where $Z \sim N(0,1)$.
- Check that $np(1-p) \geq 10$ to ensure the normal approximation is valid.
6. **Summary:**
To approximate binomial probabilities:
- Calculate mean $\mu = np$ and standard deviation $\sigma = \sqrt{np(1-p)}$.
- Convert binomial variable $S_n$ to standard normal variable $Z = \frac{S_n - \mu}{\sigma}$.
- Use standard normal tables or software to find probabilities.
This method simplifies calculations for large $n$ and moderate $p$ values.
Binomial Normal D547E4
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