kari went on-line and looked for used Honda Civics for sale. she found 15 cars l

Question

kari went on-line and looked for used Honda Civics for sale. she found 15 cars listed within 50 miles of her home. For each car, she recorded the asking price, year, and mileage. Below are the summary statistics.

a) determine the equation of the least squares line for predicting price from mileage

b) write a sentence or two interpreting the slope coefficient of this equation

C) use this equation to predict the price of a used Honda Civic with 80,000 miles

d) what fraction of the variability in prices is explained by the least squares line with year?

Explanation / Answer

a)

here slope b1=r*sy/sx=(-0.812)*(4145/34466)=-0.0977

intercept bo=(Ybar-b1*Xbar)=(10417-(-0.0977)*6392)=11041.5

therefore  equation of the least squares line for predicting price from mileage is :

Yhat=11041.5+(-0.0977)*x

b)

here slope (-0.0977) represent that for each one unit increase in mileage price decreases by 0.0977 unit.

c)

predicted price =11041.5+(-0.0977)*80000=3225.5

d)

fraction of the variability in prices is explained by the least squares line with year =r2 =(-0.812)2 =0.6953

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