Question

# The owner of Maumee Ford-Mercury-Volvo wants to study the relationship between the age of a car...

 The owner of Maumee Ford-Mercury-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) Car Age (years) Selling Price (\$000) 1 15 12.0 7 13 9.7 2 10 10.1 8 17 9.0 3 17 5.4 9 16 9.0 4 19 4.9 10 19 4.9 5 12 5.6 11 8 11.4 6 11 12.6 12 8 9.9
 (a) Determine the regression equation. (Round your answers to 3 decimal places. Negative values should be indicated by a minus sign.)

 a =
 b =
 (b) Estimate the selling price of a 11-year-old car (in \$000). (Round your answer to 3 decimal places.)
 Selling price
 (c) Interpret the regression equation (in dollars). (Round your answer to nearest dollar amount.)

 For each additional year, the car decreases \$   in value.

(a)

Independent variable: Age

Dependent varibale: selling price

Following table shows the calculations:

 X Y X^2 Y^2 XY 15 12 225 144 180 10 10.1 100 102.01 101 17 5.4 289 29.16 91.8 19 4.9 361 24.01 93.1 12 5.6 144 31.36 67.2 11 12.6 121 158.76 138.6 13 9.7 169 94.09 126.1 17 9 289 81 153 16 9 256 81 144 19 4.9 361 24.01 93.1 8 11.4 64 129.96 91.2 8 9.9 64 98.01 79.2 Total 165 104.5 2443 997.37 1358.3

Sample size: n =12

Now

Slope of the regression equation is

and intercept of the equation will be

The requried regression equation is

y ' = 14.909-0.451x

(b)

The selling price of a 11-year-old car (in \$000) is

y ' = 14.909-0.451*11 = 9.948

So required estimated selling price is \$9.948..

(c)

For each additional year, price of dollar decreased by (0.451*1000) = \$451

#### Earn Coins

Coins can be redeemed for fabulous gifts.