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.)

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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