Question

# You are a new hire at Laurel Woods Real Estate, which specializes in selling foreclosed homes...

You are a new hire at Laurel Woods Real Estate, which specializes in selling foreclosed homes via public auction. Your boss has asked you to use the following data (mortgage balance, monthly payments, payments made before default, and final auction price) on a random sample of recent sales in order to estimate what the actual auction price will be. Add a new variable that describes the potential interaction between the loan amount and the number of payments made.

 Loan Monthly Payments Payments Made Auction Price \$ 85,609 \$ 1,033.34 1 \$ 18,975 110,201 964.46 32 39,275 110,098 745.28 9 44,225 86,240 1,021.75 8 16,600 97,600 872.10 16 40,700 104,400 983.27 15 63,100 113,800 1,075.54 21 72,600 116,400 1,087.16 35 72,300 100,000 900.01 33 58,100 92,800 683.11 36 37,100 105,200 915.24 34 52,600 105,900 905.67 38 51,900 94,700 810.70 25 43,200 105,600 891.33 20 52,600 104,100 864.38 7 42,700 85,700 1,074.73 30 22,200 113,600 871.61 24 77,000 119,400 1,021.23 58 69,000 90,600 836.46 3 35,600 104,500 1,056.37 22 63,000
 Loan sum= 2046448 Payment sum= 18613.74 Payments made =476 Auction =972775

Determine the regression equation. (Round your answers to 3 decimal places. Negative amounts should be indicated by a minus sign.)

Auction price=_______ + _______ loan + _________ Monthly payment + ____________ Payment made +_________x1x3

Complete the following table. (Round your answers to 3 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign.)

 Predictor Coefficient SE Coefficient T. P-Value. Constant Loan Monthly Payment Payment made (loan)(Payment made)

Compute the t-value corresponding to the interaction term. (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)

Auction Price =-45,717.23 + 0.67*Loan +18.04*Monthly Payment -314.46*Payments Made+0.01*X1X3

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 Regression output confidence interval variables coefficients std. error t (df=15) p-value 95% lower 95% upper Intercept -45,717.2308 84,113.4083 -0.544 .5948 -225,000.7160 133,566.2543 Loan 0.6708 0.6781 0.989 .3382 -0.7745 2.1160 Monthly Payments 18.0404 36.8665 0.489 .6317 -60.5387 96.6195 Payments Made -314.4649 2,554.6508 -0.123 .9037 -5,759.5742 5,130.6443 X1X3 0.0058 0.0241 0.243 .8117 -0.0454 0.0571

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t-value= 0.24

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