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 10.7
2 8 8.8
3 13 3.0
4 15 2.7
5 10 6.0
6 9 12.1
7 10 9.0
8 13 7.8
9 12 7.8
10 15 4.7
11 6 10.8
12 6 8.9

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

a=

b=

b. Estimate the selling price of an 8-year-old car (in $000). (Round your answer to 3 decimal places.)

c.Interpret the regression equation (in dollars). (Round your answer to the nearest dollar amount.)

Homework Answers

Answer #1

Ans:

Car Age (years) Selling Price ($000)
1 12 10.7
2 8 8.8
3 13 3
4 15 2.7
5 10 6
6 9 12.1
7 10 9
8 13 7.8
9 12 7.8
10 15 4.7
11 6 10.8
12 6 8.9
mean 10.750 7.692
std. dev 3.108 3.035
r -0.687
slope,b -0.671
y-intercept,a 14.908

a)Regression equation:

y'=-0.671 x+14.908

a=14.908

b=-0.671

b)

when age=8 years

Predicted selling price,y'=-0.671*8+14.908=9.538

c)

when age=0,then selling price=14.908 thousand dollars=14908 dollars

For each additional year of age,the car selling price decrease by 671 dollars

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