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[Step-by-Step] An agent for a residential real estate company in a large city would like to be able to predict the monthly rental cost for apartments, based

Question: An agent for a residential real estate company in a large city would like to be able to predict the monthly rental cost for apartments, based on the size of the apartment, as defined by square footage. A sample of 25 apartments (stored in the file rent.xls) in a particular residential neighborhood was selected, and the information gathered revealed the following:

Apartment Monthly Rent ($) Size (Square Feet) Apartment Monthly Rent ($) Size (Square Feet)
1 950 850 14 1,800 1,369
2 1,600 1,450 15 1,400 1,175
3 1,200 1,085 16 1,450 1,225
4 1,500 1,232 17 1,100 1,245
5 950 718 18 1,700 1,259
6 1,700 1,485 19 1,200 1,150
7 1,650 1,136 20 1,150 896
8 935 726 21 1,600 1,361
9 875 700 22 1,650 1,040
10 1,150 956 23 1,200 755
11 1,400 1,100 24 800 1,000
12 1,650 1,285 25 1,750 1,200
13 2,300 1,985
  1. Construct a scatter plot.
  2. Use the least-squares method to find the regression coefficients b0 and b1.
  3. Interpret the meaning of b0 and b1 in this problem.
  4. Predict the mean monthly rent for an apartment that has 1,000 square feet.
  5. Why would it not be appropriate to use the model to predict the monthly rent for apartments that have 500 square feet?
  6. Your friends Jim and Jennifer are considering signing a lease for an apartment in this residential neighborhood. They are trying to decide between two apartments, one with 1,000 square feet for a monthly rent of $1,425. What would you recommend to them based on (a) through (d)? Why?

Price: $2.99
Solution: The downloadable solution consists of 4 pages
Deliverable: Word Document


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