The total amount of consumer credit has been increasing steadily in recent years

Question

The total amount of consumer credit has been increasing steadily in recent years. The following table gives the total outstanding consumer credit Answer part a. through e Year 2004 2005 2006 2007 2008 Consumer credit (in billions of dollors.) 2219.5 2350.8 2415.0 2551.9 2595.1 a. Find an equation for the least squares line, letting x equal the number of years since 2000. b. Use part a to find, at approximately what rate is the consumer credit growing per year? c. Use the result from part a to predict the amount of consumer credit in the year 2015 d. If this trend continues linearly, in what year will the total debt first exceed $4000 billion? e. Find and interpret the correlation coefficient. a. The equation is se integers or decimals for any numbers in the equation. Round to two decimal places as needed. b. The consumer credit is growing about billion per year. (Round to two decimal places as needed. c. The amount of consumer credit in the year 2015 will be billion. Round down to the nearest whole number.) d. If this trend continues linearly, in the year total debt will first exceed $4000 billion. Round up to the nearest whole number.) e. Select the correct choice below and fill in the answer box to complete your choice Type an integer or decimal rounded to four decimal places as needed.) OA The correlation coefficient is which indicates a fairly strong linear correlation. OB. The correlation coefficient is which indicates there is no linear correlation.

Explanation / Answer

Let us consider 2004 as starting year. So x=0 y=2219.5

Sample size =5

Mean of x = 2

Mean of y=2426.46

(a)Equation

y=95.23x+2236

(b)Growing per year . SLope of the equation

95.23 billion per year

(c) 2004-> when x=0
   2015-2004=11

So,x=11

y=95.26*11+2236

y=3284 $

(d) y=4000 So,4000=95.26x+2236

x=19 , So 2004+19 = 2023 year

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