A study of external disk drives finds the data in the accomp

A study of external disk drives finds the data in the accompanying table. The least squares line is Price = 20.37 + 0.105 Capacity(GB) with s_e = 11.04 and SE(b_1) = 0.0031, where the values are rounded to the number of decimal places shown. The assumptions and conditions for regression are met. Use this information to complete parts a through c. Click the icon to view the data table. Disk drives keep growing in capacity. Some tech experts now talk about Petabyte (PB = 1000 TB = 1,000,000 GB) drives. What does this model predict that a 1.1-PB drive will cost? The predicted price for a 1.1-PB drive is $ (Round to the nearest dollar as needed.) Find a 95% prediction interval for the price of a 1.1-PB drive. The prediction interval is (Round to the nearest dollar as needed.) Are these predictions likely to be useful? Explain. The predictions are likely useful because the data contain leveraged outliers. The predictions are likely not useful because they estimate the predicted mean price of a 1.1 -PB drive. The predictions are likely not useful because they are extreme extrapolations. The predictions are likely useful because they involve a high level of confidence.

Solution

Answer to the question)

Answer to part a)

The least square line is provided in the question

Price = 20.37 + 0.105*Capacity

Thus if capacity is 1.1 PB

In GB it becomes = 1.1 * 10^6 = 1100000

Predicted Price = 20.37 + 0.105 *1100000

Predicted Price = 115520.37

.

prediction interval is:

Predicted Price - t*SE , Predicted Price + t*SE

.