Question

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.)

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