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 | 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 | ||||||||
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 10-year-old car (in $000). (Round your answer to 3 decimal places.)
Interpret the regression equation (in dollars). (Round your answer to the nearest dollar amount.)
( a )
( b ) Given x = 10 then
y = 121.079 − 0.884 ( 10 )
then
y = 112.239
( c )
The
slope indicates that every 1-year increase in Age decreases the
Price of cars of this model by 0.884, on
average.
The y-intercept means that
a new car of this model costs 121.079 on average.
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