The owner of Maumee Ford-Mercury-Volvo wants to study the relationship between t

Question

The owner of Maumee Ford-Mercury-Volvo wants to study the relationship between the age of a car and its selling price. Listed below is a random sample of 12 used cars sold at the dealership during the last year. Car Age (years) Selling Price ($000) Car Age (years) Selling Price ($000) 1 9 12.0 7 9 8.9 2 8 10.9 8 11 9.7 3 10 4.6 9 10 9.7 4 12 4.3 10 12 2.7 5 9 5.6 11 6 10.6 6 8 13.5 12 6 8.9 PictureClick here for the Excel Data File a. Determine the regression equation. Use the rounded slope value to compute the y-intercept. (Round your answers to 3 decimal places. Negative amounts should be indicated by a minus sign.) a = b = b. Estimate the selling price (in dollars) of a 12-year-old car. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) $ c. Interpret the regression equation (in dollars). (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.) For each additional year, the car decreases $ in value.

Explanation / Answer

the regression equation is y=17.918 - 1.033 x

for x=12, y=17.918 - 1.033*12=5.522

when car is new i.e. 0 year old its mean price=17.918 and price of car will be reduced by 1.033 thousand per additional year

following information has been generated using ms-excel

x(car age) y(selling price) SUMMARY OUTPUT 9 12 8 10.9 Regression Statistics 10 4.6 Multiple R 0.609251998 12 4.3 R Square 0.371187996 9 5.6 Adjusted R Square 0.308306796 8 13.5 Standard Error 2.809085586 9 8.9 Observations 12 11 9.7 10 9.7 ANOVA 12 2.7 df SS MS F Significance F 6 10.6 Regression 1 46.58038168 46.58038168 5.90300431 0.035473853 6 8.9 Residual 10 78.90961832 7.890961832 Total 11 125.49 Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Intercept 17.91755725 3.980221101 4.501648727 0.0011402 9.049072015 26.786042 X Variable 1 -1.032824427 0.42509887 -2.429609908 0.03547385 -1.980003732 -0.0856451

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