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)
1 9 8.1
2 7 6.0
3 11 3.6
4 12 4.0
5 8 5.0
6 7 10.0
7 8 7.6
8 11 8.0
9 10 8.0
10 12 6.0
11 6 8.6
12 6 8.0

(a) Determine the standard error of estimate.



(b) Determine the coefficient of determination.



(c) Interpret the coefficient of determination.

what percent of the variation in the selling price is explained by the variation in the age of the car.

Explanation / Answer

a. 1.732 b. .29555 c. the R2 coefficient of determination is a statistical measure of how well the regression line approximates the real data points. An R2 of .3 indicates that the regression line does not perfectly fits the data.

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