A local car leadership records the age (in years) and price for cars (in thousan

Question

A local car leadership records the age (in years) and price for cars (in thousands of dirhams) it sold in the last year. The graph for the data is shown below 87% 3115 AED 93% Strong, positive linear relationship Strong, negative linear relationship 0.87% 3516 AED -473.05 Weak, positive linear relationship 0.87 2000 AED 0.93 Find the correlation coefficient, R to 2 decimal places. Comment on the value of the correlation coefficient, R. What percentage of the total variation In sales is explained by this linear model? Predict the price of the car when the age is 9 years? Your answer to the nearest whole number.

Explanation / Answer

1) Correlation coefficient R = sqrt(R2), R2 is given as 0.8668
Therefore, R = sqrt(0.8668) = 0.93(Option L)

2) Since the slope is negative and R has a very high value, more than 0.90
The relationship is strong, negative linear relationship (option E)

3) Percentage of the total variation explained is found using R2.
R2 = 0.8668 = 87% (Option A)

4) age or x = 9years
y = -473.05x + 7773.7 = -473.05*9 + 7773.7 = 3516.25 = 3516 AED(option G)

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