Correlation and Regression Trevor’s Used Car Lot has numerous cars with affordable prices. Mr. Trevor

Correlation and Regression

Trevor’s Used Car Lot has numerous cars with affordable prices. Mr. Trevor asked an advertising firm to develop a "catchy" ad to help him sell more cars. A statistician employed by the ad firm decided to take a random sample of the prices of the cars with each corresponding age. She thought it would be a good way to get started on the commercial. Below is her sampling.

Car #	Price of Car	Age of Car (in yrs.)
1	$14, 750	2
2	$ 6, 770	6
3	$12, 115	3
4	$17,825	2
5	$ 8,500	5
6	$ 7,000	4
7	$10,250	2
8	$13,450	2
9	$ 9,895	3
10	$ 8,000	4
11	$10,125	1
12	$16,500	1
13	$ 5,500	4
14	$ 6,850	3
15	$ 15,000	2

The correlation coefficient is \[{{r}_{xy}}=\] -0.70015

After seeing Trevor’s catchy ad, Davy Jones wants to buy a car from him. Use the data from the Trevor Car Lot and process it by the Regression program in Excel.

(5) Paste your printout here, or attach it to this assignment.

(5) Write the regression equation. Use it to find the predicted price of a three-year-old car that Mr. Jones wants to buy.

2. Refer to your Excel regression report. Look for the ANOVA report. Identify this F ratio. What does the F ratio tell you about the fit of the regression equation to the sample points? What does it suggest?

(Hint: If the F ratio is significant, the regression line is a good fit. If the F ratio is not significant, then the regression line does not fit the sample points very well.)

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Solution: The downloadable solution consists of 3 pages, 262 words.
Deliverable: Word Document