Question: An appraiser of real estate must us data such as square footage of a house, as well as location, depreciation, and physical condition of the neighborhood to derive the appraisal value of a house. An equation might be helpful in determining appraisal values. Use the dataset Real Estate to answer the following. The file contains the variables VALUE, SIZE (in square feet), CONDITION (a physical condition index), and DEPRECIATION (a depreciation factor).

1. Is the model with all three independent variables significant? Explain.
2. Give an interpretation of the coefficient for the variable depreciation.
3. Predict the value of a house with 1800 square feet, a condition index of .1 and a depreciation factor 0f .6.
4. Give a 95% confidence interval for the average value of a house with the characteristics listed in part c.
5. Analyze the residuals for this model. Does this model fulfill the assumptions for a multiple regression model? Explain.
6. Compare the 3 variable model to a model with only the size of the house. Test to determine which model is better to use.

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