Question

#3. Miles Driven Car age (year) Maintenance cost
--------------- ----------------- ---------------
16,320    7       $1,200
15,100                8       1,400
18,500                8         1,820
10,200                3        900
9,175                  3       650
12,770                7     1,150
8,600                 2       875
7,900                 3      900

1. Using Excel develop two linear regressions: one for maintenance cost using as a function of mileage, and the second one for maintenance cost as a function of car’s age.

2. Are both regressions adequate (look at value of Significance)? What are the coefficients of determination for those regression equations? (what does the value mean?)

3. Explain what do values of the coefficients a and b mean? (in the eq. y = a + b*x)

4. Using your result do forecasts for the maintenance costs for the 5 years old police car with 10 thousand miles driver per year. Are the forecasts the same? If not why?

Answer 1

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