A used-car dealer randomly selects 100 three-year old Holden Barinas that were sold at auction during the past month. Each car was in top condition and was equipped with automatic transmission, AM/FM cassette tape player, and air conditioning. The dealer recorded the price and the number of km on the odometer.
These data are stored in the Excel file that is attached to this;
1. Find the regression line for these data.
2. What interpretation do you give the value of y when x = 0? Justify your answer.
3. Compute the sum of squares for error (SSE) and standard error of the estimate for the data.
4. Test to determine whether there is enough evidence in the data, to infer that there is a linear relationship between the price and the odometer reading, at 5% significance level.
5. Find the coefficient of determination for the data and describe what this statistic tells you about the regression model.
The same used-car dealer has an opportunity to bid on a lot of cars offered by a rental company. The rental company has 250 Holden Barinas, all equipped with automatic transmission, air conditioning and AM/FM cassette tape players. All of the cars in this lot have about 40,000km on the odometer. The dealer would like an estimate of the selling price of all the cars in the lot. Help him find this interval estimate.
This solution provides step by step calculations, graph and interpretation of the results in an attached Word document.