The following regression equation was computed from a sample

The following regression equation was computed from a sample of 30 used cars: = 21000- 1100X where is the price of the ear and X the age of the car. SSE was found to be 90 and SS Total, 400

Solution

a)

As X increases 1 year of age of the card then the price of the car decreases $1100. since it is -ve.

b) The estimatate price of car at 5 years age of car is

   y = 21000 - 1100X

      = 21000 - 1100(5) = 15500