12.9 An agent for a residential real estate company in a large city would like t

Question

12.9 An agent for a residential real estate company in a large city would like to be able to predict the monthly rental cost for apartments, based on the size of the apartment, as defined by square footage. A sample of 25 apartments (stored in the file ) in a particular residential neighborhood was selected, and the information gathered revealed the following: a. Construct a scatter plot. b. Use the least-squares method to find the regression coefficients and . c. Interpret the meaning of and in this problem. d. Predict the monthly rent for an apartment that has 1,000 square feet. e. Why would it not be appropriate to use the model to predict the monthly rent for apartments that have 500 square feet? f. Your friends Jim and Jennifer are considering signing a lease for an apartment in this residential neighborhood. They are trying to decide between two apartments, one with 1,000 square feet for a monthly rent of $1,275 and the other with 1,200 square feet for a monthly rent of $1,425. Based on (a) through (d), which apartment do you think is a better deal?

Explanation / Answer

Rent Size 950 850 1600 1450 1200 1085 1500 1232 950 718 1700 1485 1650 1136 935 72 6 875 700 1150 956 1400 1100 1650 1285 2300 1985 1800 1369 1400 1175 1450 1225 1100 1245 1700 1259 1200 1150 1150 896 1600 1361 1650 1040 1200 755 (NNN) NNN-NNNN 1750 1200

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