The owner of Maumee FordVolvo 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
11
12.2
2
8
11.0
3
16
4.9
4
18
4.1
5
9
6.7
6
8
13.6
7
10
11.1
8
16
9.0
9
14
9.0
10
18
4.2
11
6
12.1
12
6
10.4
Click here for the Excel Data File
Determine the regression equation. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.)
Estimate the selling price of an 7yearold car (in $000). (Round
your answer to 3 decimal places.)
Interpret the regression equation (in dollars). (Round your answer
to the nearest dollar amount.)
X  y  (xxbar)^2  (yybar)(xxbar) 
11

12.2 M: 9.025 
0.4444 SS: 224.6667 
2.1167 SP: 128.4 
Let x=age
Y = selling price
Sum of X = 140
Sum of Y = 108.3
Mean X = 11.6667
Mean Y = 9.025
Sum of squares (SS_{X}) = 224.6667
Sum of products (SP) = 128.4
Regression Equation = ŷ = bX + a
b = SP/SS_{X} = 128.4/224.67 =
0.572
a = M_{Y}  bM_{X} = 9.03 
(0.57*11.67) = 15.693
ŷ = 0.572X + 15.693
B) when x= 7
Y^ = 0.527×7+15.693 . = 11.692
C) slope = 0.572
Every increase in age per year the selling price will ne decrease by 0.572.
Intercept = 15.693
The estimated average value of selljng price is equal to 15.693.
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