This is part of Business Analytics Data Analytics course I

This is part of Business Analytics / Data Analytics course I am taking at a community college -

Question:-

A bank developed a model for predicting the average checking and savings account balance as balance=-17732+367*age+1300*years education+0.116*household wealth
a. Explain how to interpret numbers in this model
b.Suppose that a customer is 32 years old,is a college graduate(so that years education=16) and has a household wealth of $150000. What is the predicted bank balance?

Solution

When we were born, according with this model, we represent a negative balance, a financial charge to our keepers, it is the independent term of 17,732 as a loss. Conforming we grow up, we are more productive, and our potential to generate flows and savings is increasing, $367 for each year of life, $1,300 for each year of formal education and only $0.12 per each dollar of family wealth.

According with this representation, all these factors (years of life, years of formal education and family wealth) has a positive influence in the final financial balance (dollars), in the shown proportions.

Case: A customer is 32 years old, is a college graduate (so that years education=16) and has a household wealth of $150000:

Balance = -17,732 + 367 (32) + 1,300 (16) + 0.116 (150,000) = $32,212