Originally Posted by
O-Deka-K
Say the real probability is 41%. Let's take a sample size of 30. From 30 independent tests, let's say I get 10 successes (exactly 41% of 30 is 12.3, so 10 seems reasonable).
Formula (1) is:
p' +/- z * squareroot( p' (1- p') / n )
where:
p' is the observed probability (10/30)
z (or z alpha /2) is the (1 - alpha/2) percentile of a standard normal distribution
n is the sample size (30)
For a 95% confidence interval, z is 1.96.
This gives us an interval of 0.3333 +/- 0.1687. What does that mean? It means, "I am 95% confident that the real probability is between 16.5% and 50.2%". And it just so happens that 41% does fall within that range.
However, this interval is pretty large, so you can't really say "Yes, the percentage really is 41%". If you want a more accurate measurement, then you need to reduce the interval size. To do that, increase the sample size n. If you increase n to 10000, the range is +/- 0.92%, which is much better.