The owner of Maumee Motors wants to study the relationship between the age of a

Question

The owner of Maumee Motors 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 Maumee Motors during the last year: a. Determine the correlation coefficient. (Negative answer should be indicated by a minus sign. Round the final answer to 3 decimal places.) b. Determine the coefficient of determination. (Round the final answer to 3 decimal places.) c. Interpret these statistical measures. Does it surprise you that an inverse relationship exists? (Round the final answer to the nearest whole number.) Weak negative (inverse) correlation between age of car and selling price. So, percent of the variation in the selling price is explained by the variation in the age of the car.

Explanation / Answer

Using excel we have below regression analysis,

(a) r = 0.322

(b) coefficient of determination = 0.1037

(c) So, 10.37% of the variation in the selling price is explained by the variation in the age of the car.

SUMMARY OUTPUT Regression Statistics Multiple R 0.3220 R Square 0.1037 Adjusted R Square 0.0140 Standard Error 1.9996 Observations 12 ANOVA df SS MS F Significance F Regression 1 4.6251 4.6251 1.1567 0.3074 Residual 10 39.9841 3.9984 Total 11 44.6092

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