Question

Steve Taylor is the owner of Home Plus, which is a chain of home improvement stores. He would like to investigate the relationship between month advertising and monthly sales. The table below shows the amount spent on advertising, in millions of dollars, over several months along with the corresponding sales, also in millions of dollars.

Month	Advertising ($ millions)	Sales ($ millions)
1	3	11
2	3	13
3	4	12
4	5	21
5	1	7

Use the Home Plus data to calculate:

1. The standard error of the estimate.
2. The 95% confidence interval for the average sales for a month where $4 million was spent on advertising.

Answer 1

Using excel<data<data analysis<regression

Here is the output:

Regression Analysis
	r²	0.802
	r	0.896
	Std. Error	2.629
	n	5
	k	1
	Dep. Var.	Sales
ANOVA table
Source	SS	df	MS	F	p-value
Regression	84.0727	1	84.0727	12.17	.0398
Residual	20.7273	3	6.9091
Total	104.8000	4
Regression output				confidence interval
variables	coefficients	std. error	t (df=3)	p-value	95% lower	95% upper
Intercept	2.9091
Month Advertising	3.0909	0.8861	3.488	.0398	0.2710	5.9108
Predicted values for: Sales
		95% Confidence Interval	95% Prediction Interval
Month Advertising	Predicted	lower	upper	lower	upper	Leverage
4	15.273	10.904	19.641	5.836	24.710	0.273

1. The standard error of the estimate= 2.6285
2. The 95% confidence interval for the average sales for a month where $4 million was spent on advertising.

The 95% confidence interval is (10.904,19.641)