Write your solution in steps, labeling all your main steps and showing all your
ID: 2921572 • Letter: W
Question
Write your solution in steps, labeling all your main steps and showing all your work in each main step.
Type the problem statement together with your solution.
I have already solved all the problems but as we solve in excel I am not sure how to write out my steps in mathmatical terms and type a problem statement with the solution. I am not even sure how to interpret the data from the plot?!
The table contains the value of the house and the amount of rental income in a year that the house brings in ("Capital and rental," 2013) Table: Data of House Value versus Rental Value RentalValue RentaValueRentalValue Rental 81000 6656 77020576 75000 7280675006864 36 90000624085000 7072 121000 12064115000 7904 110000 7072 104000 7904 135000| 832 130000| 97761126000| 62401125000| 7904 145000 8320140000 9568 140000 9152 135000 7488 165000 13312 165000 8528 155000 7488 148000 8320 178000 | 1 1 856 1 74000 | 1 04001 1 70000 | 9568| 1 70000 | 1 2688 200000 12272 200000 10608 194000 11232190000 8320 214000 8528 208000 10400 200000 10400 200000 8320 240000 10192 240000 12064 240000 11648 225000 12480 289000 11648 270000 12896 262000 10192 244500 11232 325000| 1248 310000| 1248 303000| 122721 3000001 12480 Chart Area 95000 7904 94 1. Create a scatter plot of the data House Value VS Rental Income 14000 12000 10000 8000 C 6000 4000 2000 50000 100000 150000 200000 250000 300000 350000 House ValueExplanation / Answer
Good that you have solved the problem, I can help you in terms of steps and interpretating the results:
To write out the mathematical steps just write down the Excel formulae of CORREL for coefficient of correlation.
Mention that coefficient of determination or Rsquare is just a square of coefficient of correlation. Rsquare = r^2
To inderpret the scatter plot:
1. You have taken a correaltion (r) between the 2 variable, which appears to be fairly linear if you were to fit a OLS line in Excel.
r at .76 is a very good r value, indicating fairly high positive relationship between the 2 variables
Rsquare of .58 means that 58% of Rental income is explained by House Value, which is not so good considering 42% is to be explained by some other variable. But for 1 variable to explain 58% , I would say it is pretty good.
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