A linear model to predict the price of a certain car (in S) from its mileage (in

Question

A linear model to predict the price of a certain car (in S) from its mileage (in miles) was fit to 18 cars that were available during a certain week within 200 miles of a certain city. The model was Price = 21, 142.61 - 0.11150 mileage. The 18 cars had an average price of $19, 613.52(SD = $1712.43), and the correlation between Price and Mileage was -0.877. If the Mileage of a car was 2 SD above average number of miles, what Price would your predict for it? The predict Price would be $. (Round to the nearest cent as needed)

Explanation / Answer

predicted price = ybar + a* r*sd (Y)

where a is how many sd is X ahead of Xbar = -2   

r is corelation = -0.877

sd (Y) = 1712.46

ybar = 19613.52

hence predicted value = 19613.52 +(- 2)*(- 0.877 )*  1712.46  

= 22617.17484

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