Let $T$ $\in \mathfrak{B}(\mathbb{H})$ be normal. Let $A$ be the closed subalgebra generated by $T$, $T^{*}$ and $I$. Suppose $T$ can be approximated in norm by finite linear combinations of projections in $A$. What is the necessary and sufficient condition on $\sigma(T)$ for this to happen?
I am not sure how to approach this question. Do we use the spectral theorem for normal operators? Does it follow that since $T$ can be norm-approximated by linear combinations of projections, its spectrum must be finite? I would be grateful for some hints on how to start.