An agent for a residential real estate company in Silver Spring, Md. (outside DC

Question

An agent for a residential real estate company in Silver Spring, Md. (outside DC) has the business objective of developing more accurate estimates of the monthly rental cost for apartments. Toward that goal, the agent would like to use the size of the apartment, in square footage, to predict the monthly rental cost. The agent has collected a sample of 48 one-bedroom apartments. The data is shown below:

Size (Sq. ft.) Rent ($)

524 1110

616 1175

666 1190

830 1410

450 1210

550 1225

780 1480

815 1490

1070 1495

610 1680

835 1810

660 1625

590 1469

675 1395

744 1150

820 1140

912 1220

628 1434

645 1519

840 1105

800 1130

804 1250

950 1449

800 1168

787 1224

960 1391

750 1145

690 1093

840 1353

850 1530

965 1650

1060 1740

665 1235

775 1550

960 1545

827 1583

655 1575

535 1310

625 1195

749 1200

634 1185

641 1444

860 1385

740 1275

593 1050

880 1650

895 1340

692 1560

Develop a linear regression model to estimate apartment rental costs based on square footage using either Excel or Minitab

Explanation / Answer

from excel--data-data analysis-regression:

below is the output

hence   linear regression model rent =992.9927+0.493167*X

Regression Statistics Multiple R 0.354314 R Square 0.125539 Adjusted R Square 0.106529 Standard Error 186.0407 Observations 48 ANOVA df SS MS F Significance F Regression 1 228565.2 228565.2 6.603807 0.013481 Residual 46 1592112 34611.13 Total 47 1820677 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0% Intercept 992.9927 147.3669 6.738236 2.25E-08 696.3586 1289.627 696.3586 1289.627 Size 0.493167 0.19191 2.569787 0.013481 0.106873 0.879461 0.106873 0.879461

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