Question

CAR	1	2	3	4	5	6	7	8	9	10	11	12
AGE	13	10	15	17	11	10	11	15	15	17	8	8
PRICE	13.1	11.8	5.7	4.9	6.8	14.0	11.4	9.8	9.8	4.5	13.0	11.0

Listed above is random sample of 12 used cars sold at the dealership during the last year.

A. Determine the regression equation?

a =

b =

B. Estimate the selling price of an 7-year old car ($000)

selling price?

C. Interpret regression equation (in dollars)

For each additional year, the car decreases ______, in value.

Answer 1

Following table shows the calculations:

	AGE, X	PRICE, Y	X^2	Y^2	XY
	13	13.1	169	171.61	170.3
	10	11.8	100	139.24	118
	15	5.7	225	32.49	85.5
	17	4.9	289	24.01	83.3
	11	6.8	121	46.24	74.8
	10	14	100	196	140
	11	11.4	121	129.96	125.4
	15	9.8	225	96.04	147
	15	9.8	225	96.04	147
	17	4.5	289	20.25	76.5
	8	13	64	169	104
	8	11	64	121	88
Total	150	115.8	1992	1241.88	1359.8

(C)

For each additional year, the car decreases 0.7496 ($000), in value.