An insurance company analyst is interested in analyzing the dollar value of dama

Question

An insurance company analyst is interested in analyzing the dollar value of damage in automobile accidents. She collects data from 115 accidents, and records the amount of damage as well as the age of the driver. The results of her regression analysis are listed below. What would be the dollar value of an accident involving a 25-year-old driver? ssion Statistics Multiple R R Square Adjusted R Square Standard Error Observations 0.187 0.035 0.026 5652.090 115.000 ANOVA AMS F Significance Regression Residual Total 130433116.219 130433116.219 4.083 0.046 113 3609911959.868 31946123.539 114 3740345076.087 Coefficient Standard ErrorSP-value 6.987 2.021 10725.802 1535.215 Intercept Age 0.000 0.046 69.964 34.625 O A $11,836.56 B. $10,795.47 $13,372.58 O D.$12,474.90

Explanation / Answer

Correct option is (D).

Estimated regression equation: Value of damage ($) = 10,725.802 + 69.964 x Age of driver

When age of driver = 25,

Value of damage ($) = 10,725.802 + 69.964 x 25

= 10,725.802 + 1,749.1

= 12,474.90

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