If the least squares equation for sales data going from 2004

If the least squares equation for sales data going from 2004 to 2008 is = 10 + 1.3t (in $millions), what is the value of t and the forecast for 2010?

t = 6, = 17.8

t = 0, = 10.0

t = 7, = 19.1

t = 10, = 0.0

Solution

As

t = 0 is 2004, then 2010 is t = 6.

Thus,

y^ = 10 + 1.3t | t = 6

y^ = 10 + 1.3*6 = 17.8 [ANSWER, OPTION A]