A real estate agent wishes to estimate the monthly rental fo

A real estate agent wishes to estimate the monthly rental for apartments based on the size (square feet) and location of the apartments. She chose the model beta_0 + beta_1x_2 + beta_2x_2 + epsilon, where x_1i represents the square footage of the apartment and x_2 ={1 if located in town center 0 if not located in town center This linear regression model was fitted to a sample of size 50 to produce the regression equation below. Complete parts a through c. y = 145 + 1.1x_1 + 350x_2 Predict the average monthly rent for an apartment located in the town center that has 1,250 square feet.

Solution

Average monthly rent = $14,245