Worked example: A sensor outputs an analog voltage that swings smoothly between 0 V and 5 V. We digitise it with a 3-bit converter (8 levels). Step 1: 3 bits give 2³ = 8 levels: 0 to 7. Step size = 5 V / 7 ≈ 0.714 V per level. Step 2: The sensor reads 3.0 V. Level = 3.0 / 0.714 ≈ 4.2, rounded to 4. Step 3: Level 4 in binary is 100. So 3.0 V becomes the digital code 100. Step 4: Reconstructed voltage = 4 × 0.714 = 2.86 V. The quantisation error is 3.0 − 2.86 = 0.14 V. Conclusion: the analog wave became a stream of 3-bit digital codes; finer steps (more bits) would shrink the error — this is exactly how a microphone's analog voice becomes digital audio.