State the linear regression equation, Engineering Mathematics

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An auto manufacturing company wanted to investigate how the price of one of its car models depreciates with age. The research department at the company took a sample of eight cars of this model and collected the following information on the ages (in years) and prices (in hundreds of dollars) of these cars.

Age (x)

8

3

6

9

2

5

6

3

Price (y)

16

74

40

19

124

36

33

89

a) Set up a scatter diagram for age and price.

b) At the 0.05 level of significance, determine whether there is a significant linear relationship between age and price.

c) State the linear regression equation.

d) Predict the average price obtained when the age of the car is 7 years old.

e) Determine the coefficient of determination, r2, and interpret its meaning.

f) How useful do you think this regression model is for predicting price?


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