The accompanying table shows a portion of data consisting of the selling price,

Question

The accompanying table shows a portion of data consisting of the selling price, the age, and the mileage for 20 used sedans.

Determine the sample regression equation that enables us to predict the price of a sedan on the basis of its age and mileage. (Negative values should be indicated by a minus sign. Round your answer to 2 decimal places.)

Predict the selling price of a seven-year-old sedan with 66,000 miles. (Round intermediate calculations to at least 4 decimal places and final answer to 2 decimal places.)

The accompanying table shows a portion of data consisting of the selling price, the age, and the mileage for 20 used sedans.

Explanation / Answer

(a)

The regression equation is Selling price = 22288.39 - 528.30 * Age - 0.09 * Miles

(b) The slope coefficient of Age is 528.13, which suggests that for every additional year of age, the predicted price of car decreases by $528.13, holding number of miles constant.

(c) Selling price = 22288.39 - 528.30 * 7 - 0.09 * 66000 = $12650.29

SUMMARY OUTPUT Regression Statistics Multiple R 0.825307068 R Square 0.681131756 Adjusted R Square 0.643617845 Standard Error 2124.671826 Observations 20 ANOVA df SS MS F Significance F Regression 2 163927757.5 81963878.75 18.15677803 6.03526E-05 Residual 17 76741916.25 4514230.368 Total 19 240669673.8 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 22288.3943 1321.389313 16.8673941 4.74616E-12 19500.50657 25076.28203 19500.50657 25076.28203 Age -528.3011179 224.02128 -2.358263099 0.030597257 -1000.9447 -55.65753595 -1000.9447 -55.65753595 Miles -0.087700663 0.025368819 -3.457025852 0.003011908 -0.141224191 -0.034177134 -0.141224191 -0.034177134

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