Question

The owner of Maumee Ford-Volvo wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year. Car: 1. 2, 3, 4,5,6,7,8,9,10,11,12

Age (years):9,6,11,15,8,6,8,12,9,15,5,5

Selling Price ($000): 10.4, 8.6, 4.3, 3.5, 5.1, 11.0, 9.1, 7.5, 7.5, 2.1,11.1, 10.1

Click here for the Excel Data File Determine the regression equation. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.)

Estimate the selling price of a 12-year-old car (in $000). (Round your answer to 3 decimal places.)

interpret the regression equation (in dollars). (Round your answer to the nearest dollar amount.)

Answer 1

	x	y	(x-xbar)^2	(y-ybar)^2	(x-xbar)*(y-ybar)
	9	10.4	0.0069444	8.265625	-0.239583333
	6	8.6	9.5069444	1.155625	-3.314583333
	11	4.3	3.6736111	10.400625	-6.18125
	15	3.5	35.006944	16.200625	-23.81458333
	8	5.1	1.1736111	5.880625	2.627083333
	6	11	9.5069444	12.075625	-10.71458333
	8	9.1	1.1736111	2.480625	-1.70625
	12	7.5	8.5069444	0.000625	-0.072916667
	9	7.5	0.0069444	0.000625	0.002083333
	15	2.1	35.006944	29.430625	-32.09791667
	5	11.1	16.673611	12.780625	-14.59791667
	5	10.1	16.673611	6.630625	-10.51458333
sum	109	90.3	136.91667	105.3025	-100.625
mean	9.083333333	7.525	sxx	syy	sxy
	slope=b=sxy/sxx	-0.734936093
	intercept=a=ybar-(slope*xbar)	14.20066951

a) Determine the regression equation

a=14.201

b=-0.735  

#regression equation y^=a+b*x

y^=14.201-0.735*x

b) Estimate the selling price of a 12-year-old car (in $000) ie x=12

y^=14.201-0.735*12

y^=5.381

c) Slope : each additional year, selling price decreased by 0.735

Intercept : selling price is 14.201 at 0th year .