Exercise 17-5 Algo (Round intermediate calculations to at least 4 decimal places
ID: 3062974 • Letter: E
Question
Exercise 17-5 Algo
(Round intermediate calculations to at least 4 decimal places.)
House price y is estimated as a function of the square footage of a house x and a dummy variable d that equals 1 if the house has ocean views. The estimated house price, measured in $1,000s, is given by.
Compute the predicted price (in $1,000s) of a house with ocean views and square footage of 1,900. (Round your answer to 2 decimal places.)
Compute the predicted price (in $1,000s) of a house with ocean views and square footage of 2,900. (Round your answer to 2 decimal places.)
Compute the predicted price (in $1,000s) of a house without ocean views and square footage of 1,900. (Round your answer to 2 decimal places.)
Compute the predicted price (in $1,000s) of a house without ocean views and square footage of 2,900. (Round your answer to 2 decimal places.)
(Round intermediate calculations to at least 4 decimal places.)
House price y is estimated as a function of the square footage of a house x and a dummy variable d that equals 1 if the house has ocean views. The estimated house price, measured in $1,000s, is given by.
Explanation / Answer
Solution:
a-1) Y = 124.52 + 0.15x + 57.50d
given:
x = 1900
d = 1, as ocean view
On plugging the values we get:
Y = 124.52 + 0.15*1900 +57.30 *1
Y = 466.82
a-2) x = 2900
d = 1, ocean view
Y = 124.52 + 0.15*2900 +57.30 *1
Y = 616.82
b-1) x = 1900
d = 0 , no ocean view
Y = 124.52 + 0.15*1900 +57.30 *0
Y = 409.52
b-2) x = 2900
d = 0 , no ocean view
Y = 124.52 + 0.15*2900 +57.30 *0
Y = 559.52
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