Question

You are a new hire at Laurel Woods Real Estate, which specializes in selling foreclosed homes via public auction. Your boss has asked you to use the following data (mortgage balance, monthly payments, payments made before default, and final auction price) on a random sample of recent sales in order to estimate what the actual auction price will be. Add a new variable that describes the potential interaction between the loan amount and the number of payments made.

Loan ($)	Payments ($)	Payments Made	Auction ($)
85613	1003.1	1	28525
113255	929.31	36	40575
110315	749.28	7	45250
91935	726.17	8	16600
97600	831.85	21	40700
104400	983.27	18	63100
113800	1075.54	20	72600
116400	1087.16	35	72300
100000	900.01	33	58100
92800	683.11	36	37100
105200	915.24	34	52600
105900	905.67	38	51900
94700	810.7	25	43200
105600	891.33	20	52600
104100	864.38	7	42700
85700	1074.73	30	22200
113600	871.61	24	77000
119400	1021.23	58	69000
90600	836.46	3	35600
104500	1056.37	22	63000

1) Determine the regression equation.  

Auction price= ( ) + ( )loan +( )monthly payment+ ( )payments made + ( )x1x3

2.Complete the following table. (Round your answers to 3 decimal places. Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign.)  

Predictor	Coefficient	SE Coefficient	t	p-value
Constant
loan
monthly payment
payments made
(Loan)(payments made)

3)Compute the t-value corresponding to the interaction term. (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign.)

Answer 1