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Calculate, test, and interpret the relationship between two variables using the correlation coefficient

The owner of Maumee Ford-Mercury-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 ($000) Car Age (years) Selling Price ($000)
1 12 10.3 7 12 8.0
2 10 9.2 8 16 7.8
3 15 4.6 9 14 7.8
4 18 4.2 10 18 4.3
5 12 5.1 11 8 10.0
6 10 11.6 12 8 8.8

(a) Determine the regression equation. (Round your answers to 3 decimal places. Negative values should be indicated by a minus sign.)
a =
b =

(b) Estimate the selling price of a 13-year-old car (in $000). (Round your answer to 3 decimal places.)
Selling price =

(c) Interpret the regression equation (in dollars). (Round your answer to nearest dollar amount.)
For each additional year, the car decreases $_____ in value.

Solution Preview

Hi there,

Thanks for letting me work on your post. Here is my explanation:

mean of years (x) = (12+10+...+8)/12= 12.75
mean of ...

Solution Summary

The expert interprets the relationship between two variables.

$2.19