Determining the Selling Price of a Home Determining how much to pay for a home is...

Determining the Selling Price of a Home Determining how much to pay for a home is one of the more difficult decisions that must be made when purchasing a home. There are many factors that play a role in a home’s value. Location, size, number of bedrooms, number of bathrooms, lot size, and building materials are just a few. Fortunately, the website Zillow.com has developed its own formula for predicting the selling price of a home. This information is a great tool for predicting the actual sale price. For example, the data to the right show the “zestimate”—the selling price of a home as predicted by the folks at Zillow and the actual selling price of the home for homes in Oak Park, Illinois. The graph below, called a scatter diagram, shows the points (291.5, 268), (320, 305), . . . , (368, 385) in a Cartesian plane. From the graph, it appears that the data follow a linear relation. 1. Imagine drawing a line through the data that appears to fit the data well. Do you believe the slope of the line would be positive, negative, or close to zero? Why? 2. Pick two points from the scatter diagram. Treat the zestimate as the value of x and treat the sale price as the corresponding value of y. Find the equation of the line through the two points you selected. 3. Interpret the slope of the line. 4. Use your equation to predict the selling price of a home whose zestimate is $335,000. 5. Do you believe it would be a good idea to use the equation you found in part 2 if the zestimate is $950,000? Why or why not? 6. Choose a location in which you would like to live. Go to www.zillow.com and randomly select at least ten homes that have recently sold. (a) Draw a scatter diagram of your data. (b) Select two points from the scatter diagram and find the equation of the line through the points. (c) Interpret the slope. (d) Find a home from the Zillow website that interests you under the “Make Me Move” option for which a zestimate is available. Use your equation to predict the sale price based on the zestimate. can i get the full answer of this question please

Solutions

Expert Solution

milcah answered 1 year ago

Next > < Previous

Related Solutions

How much would you have to put down on a house with a selling price of...

How much would you have to put down on a house with a selling price of $90,000 and an appraised value of $95,000 when the lender required an 80% loan-to-value ratio?

How much are you going to pay? How much insurance company pays?

Use the following information to answer the following questions deductible: $1000 coinsurance: 20% out-of-pocket maximum: $8000 let's say you have $30000 in covered medical expenses in January: How much are you going to pay? How much insurance company pays? if you have an additional $20000 in medical expenses: how much are you going to pay? how much insurance company pays?

The total cost concept is the most convenient method for determining a product's selling price if...

The total cost concept is the most convenient method for determining a product's selling price if a company includes all manufacturing, selling, and administrative costs associated with the product in its reported cost. A markup is then added to achieve the firm's desired profit. For example, assume that the following costs are incurred to make 10,000 units of a product: Variable manufacturing costs $5 per unit Variable selling and administrative costs $2 per unit Fixed factory overhead costs $80,000 Fixed...

How much of the tax do consumer pay?

How much would you be willing to pay for an investment that will pay you and...

How much would you be willing to pay for an investment that will pay you and your heirs $16,000 each year in perpetuity if the first payment is to be received in 9 years? a) Assuming your opportunity cost is 6%? b) if you want the payments to grow by 2% indefinitely. problem must be in excel

Facts: There is a home you want to purchase with a selling price of $220,000. You...

Facts: There is a home you want to purchase with a selling price of $220,000. You have saved $42,000 for a down payment. The bank charges 2 points on the balance of the note (before taking fees into account) in exchange for a 3% rate. The bank also charges financing fees of $800. You request that the fees and points be added to the balance of the mortgage, which the bank agrees to. Required: Based on the preceding facts, prepare...

How much would you be willing to pay today for an investment that promises to pay...

How much would you be willing to pay today for an investment that promises to pay you pay $26,000 in 35 years if your required return on the investment is 9% per year?

An owner of a football stadium is determining how much fertilizer is needed to keep the...

An owner of a football stadium is determining how much fertilizer is needed to keep the grass in the football stadium green. Thus, the owner collected the following data on how much fertilizer was used in 10 football stadiums from throughout the country. The unit of measurement is number of pounds per 1,000 square feet. Field Fertilizer 1 1.35 2 1.46 3 1.51 4 1.42 5 1.46 6 1.35 7 1.59 8 1.37 9 1.33 10 1.66 Prior to the...

The information below represents the relationship between the selling price (Y, in $1,000) of a home,...

The information below represents the relationship between the selling price (Y, in $1,000) of a home, the square footage of the home (X1), and the number of rooms in the home (X2). The data represents 60 homes sold in a particular area of East Lansing, Michigan and was analyzed using multiple linear regression and simple regression for each independent variable. The first two tables relate to the multiple regression analysis. Summary measures Multiple R 0.9408 R-Square 0.8851 Adj R-Square 0.8660...

CALCULATE: What Affects How Much We Pay in Taxes? Everyone has to pay taxes, but how...

CALCULATE: What Affects How Much We Pay in Taxes? Everyone has to pay taxes, but how much you pay depends on a lot of factors

Subjects