Question

An auto manufacturing company wanted to investigate how the price of one of its car models depreciates with age. The research department at the company took a sample of eight cars of this model and collected the following information on the ages (in years) and prices (in hundreds of dollars) of these cars.

Age	8	5	5	4	3	8	4	2
Price	32	48	60	60	65	25	64	71

Find the least squares regression line equation in the form y^=a+bx. Use "Age" as the independent variable and "Price" as the dependent variable.

Round your answers to four decimal places.

y^=___+(___)x

Predict the price of a 5 year-old car of this model.

Round your answer to one decimal place.

ypred=___

Answer 1

Computational Table:

Calculation:

For Slope:

b = -7.3878

For Intercept:

a = 53.13 - (-7.3878 * 4.88)

a = 89.1407

Therefore, the least square regression line would be,

= 89.1407 - 7.3878(X)

Predict the price of a 5 year-old car of this model.

= 89.1407 - 7.3878(X)

Put X = 5,

= 89.1407 - 7.3878*5

= 52.2