Question

The owner of Maumee Ford-Volvo wants to study the relationship between the age of a car...

The owner of Maumee Ford-Volvo wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year.

Car Age (Years) Selling Price ($000)
1 12 10.3
2 10 9.2
3 15 4.6
4 18 4.2
5 12 5.1
6 10 11.6
7 12 8.0
8 16 7.8
9 14 7.8
10 18 4.3
11 8 10.0
12 8 8.8

a) Determine the regression equation

a=
b=

b) Estimate the selling price of a 13-year-old car (in $000)

c) Interpret the regression equation (in dollars).

Homework Answers

Answer #1

a)

X Y X⋅Y X⋅X
12 10.3 123.6 144
10 9.2 92 100
15 4.6 69 225
18 4.2 75.6 324
12 5.1 61.2 144
10 11.6 116 100
12 8 96 144
16 7.8 124.8 256
14 7.8 109.2 196
18 4.3 77.4 324
8 10 80 64
8 8.8 70.4 64

a = 14.667

b = - 0 .551

b) x = 13

y = 14.667 - 0.551 ( 13 )

= 7.504

c) Slope : each additional year, selling price decreased by 0.551

Intercept : selling price is 14,667 at 0th year .

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