Question

the owner of maumee Ford-Volvo

Saved Help Save & Exit Check my The owner of Maumee Ford-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 (5000) 9.3 7.6 3.0 4.0 5.3 WAN 6.2 4.8 10.1 9.1 Click here for the Excel Data File a. Determine the regression equation. (Negative amounts should be indicated by a minus sign. Round your answers to 3 decimal places.) Prev 1 of 5 Next >

Answer 1

Using Excel, go to Data, select Data Analysis, choose Regression. Put Age in X input range and Selling Price in Y input range.

SUMMARY OUTPUT
Regression Statistics
Multiple R	0.754
R Square	0.568
Adjusted R Square	0.525
Standard Error	1.655
Observations	12
ANOVA
	df	SS	MS	F	Significance F
Regression	1	36.0749	36.0749	13.1651	0.0046
Residual	10	27.4018	2.7402
Total	11	63.4767
	Coefficients	Standard Error	t Stat	P-value	Lower 95%	Upper 95%
Intercept	13.314621	1.809	7.359	0.000	9.284	17.346
Age	-0.538833	0.149	-3.628	0.005	-0.870	-0.208

a) Regression equation

y = a+bx

a = 13.315, b = -0.539

Selling price = 13.315 - 0.539*Age

b) Age = 6

Selling price = 13.315621 - 0.538833*6= 10.082623 (thousands)

Selling price = 10.082623*1000 = $10082.623

c) For each additional year, the car's selling price decreases by 539 dollars.(0.538833*1000=538.833)