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 y =beta 0 + beta 1 x1 + beta 2 x2 + epsilon where x1 represents the square footage of the apartment and x2 ={ 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 + 1.1x1 + 350x2 Predict the average monthly rent for an apartment located in the town center that has 1.250 square feet. $ (Simplify your answer.)

Solution

y-hat =  145 + 1.1*1250 + 350*1 = 1870