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				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

( 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.