Question

Toyota corporation conducts research on the relationship between the age of a car and its selling price. Below is the result from a sample of 12 used car dealers.

Car				Age (years)				Selling Price ($000)
	1				10				8.3
	2				7				6.9
	3				14				1.4
	4				18				2.4
	5				8				6.8
	6				8				9.4
	7				8				7.5
	8				15				5.6
	9				13				5.6
	10				18				3.1
	11				6				9.4
	12				6				7.6

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

2. Estimate the selling price of an 10-year-old car (in $000). (Round your answer to 3 decimal places.)

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

Answer 1

The regression equation is:

y = 11.579 - 0.496*x

The selling price of a 10-year-old car = 6.621

For every additional age of a car, the selling price will decrease by 0.496.

Period	Selling Price ($000)	Age (years)
Period 1	8.3	10
Period 2	6.9	7
Period 3	1.4	14
Period 4	2.4	18
Period 5	6.8	8
Period 6	9.4	8
Period 7	7.5	8
Period 8	5.6	15
Period 9	5.6	13
Period 10	3.1	18
Period 11	9.4	6
Period 12	7.6	6
Intercept	11.579
Slope	-0.496
Forecast	6.621	10

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