EXAMPLE 16.3 The Normal Approximation

CASE 16.1 In our used car consumer example, we are interested in approximating . Continuity correction acts as if the whole number 155 occupies the entire interval from 154.5 to 155.5. We calculate the -value as because the value 155 is included in the range whose probability we want. Here is the calculation:

The continuity correction gives a result close to the exact value .