# Scatter diagrams and coefficients of correlation and determination

A car dealership wants to study the relationship between the age of a car and the selling price. Below is a sample of 12 cars:

Car Age(years) Selling Price ($000)

1 9 8.1

2 7 6

3 11 3.6

4 12 4

5 8 5

6 7 10

7 8 7.6

8 11 8

9 10 8

10 12 6

11 6 8.6

12 6 8

A. If we want to estimate the selling price on the basis of age, which variable is the dependent and which is the independent?

B. Draw a scatter diagram.

C. Determine the coefficient of correlation.

D. Determine the coefficient of determination.

E. Interpret the measures. Does it surprise you that the relationship is inverse?

https://brainmass.com/statistics/analysis-of-variance/scatter-diagrams-coefficients-correlation-determination-61096

#### Solution Preview

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Car dealership wants to study the relationship between the age of a car and the selling price. Below is a sample of 12 cars:

Car Age(years)X Selling Price ($000) Y

1 9 8.1

2 7 6

3 11 3.6

4 12 4

5 8 5

6 7 10

7 8 7.6

8 11 ...

#### Solution Summary

This solution involves drawing a scatter diagram, determining coefficients of correlation and determination, and interpreting the measures.