If the probability of winning a slot machine is 5% and you are going to play 500 pulls. Using a normal approximation. What’s the probability that you win less than 40?

Answer:

0.9986 = 99.86% probability that you win less than 40

Step-by-step explanation:

Binomial probability distribution

Probability of exactly x sucesses on n repeated trials, with p probability.

Can be approximated to a normal distribution, using the expected value and the standard deviation.

The expected value of the binomial distribution is:

[tex]E(X) = np[/tex]

The standard deviation of the binomial distribution is:

[tex]\sqrt{V(X)} = \sqrt{np(1-p)}[/tex]

Normal probability distribution

Problems of normally distributed distributions can be solved using the z-score formula.

In a set with mean [tex]\mu[/tex] and standard deviation [tex]\sigma[/tex], the zscore of a measure X is given by:

[tex]Z = \frac{X - \mu}{\sigma}[/tex]

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.

When we are approximating a binomial distribution to a normal one, we have that [tex]\mu = E(X)[/tex], [tex]\sigma = \sqrt{V(X)}[/tex].

The probability of winning a slot machine is 5% and you are going to play 500 pulls.

This means that [tex]p = 0.05, n = 500[/tex]

Mean and Standard deviation:

[tex]\mu = E(X) = np = 500*0.05 = 25[/tex]

[tex]\sigma = \sqrt{V(X)} = \sqrt{np(1-p)} = \sqrt{500*0.05*0.95} = 4.8734[/tex]

What’s the probability that you win less than 40?

Using continuity correction, this is P(X < 40 - 0.5) = P(X < 39.5), which is the pvalue of Z when X = 39.5. So

[tex]Z = \frac{X - \mu}{\sigma}[/tex]

[tex]Z = \frac{39.5 - 25}{4.8734}[/tex]

[tex]Z = 2.98[/tex]

[tex]Z = 2.98[/tex] has a pvalue of 0.9986

0.9986 = 99.86% probability that you win less than 40

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