Solutions Statistics

Solution) An agent for a real estate company in a large city would like to be able to predict the monthly rent

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

Apartment	Rent ($)	Size (sf)	Apartment	Rent ($)	Size (sf)
1	950	850	14	1,800	1369
2	1,600	1450	15	1,400	1175
3	1,200	1085	16	1,450	1225
4	1,500	1232	17	1,100	1245
5	950	718	18	1,700	1259
6	1,700	1485	19	1,200	1150
7	1,650	1136	20	1,150	896
8	935	726	21	1,600	1361
9	875	700	22	1,650	1040
10	1,150	956	23	1,200	755
11	1,400	1100	24	800	1000
12	1,650	1285	25	1,750	1200
13	2,300	1985

a) Use the least squares method to find the regression coefficients b 0 and b 1 .

b) State the simple linear regression equation

c) 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 with a monthly rent of $1,275 and the other with 1,200 square feet for a monthly rent of $1,425. What would you recommend to them? Why?

Price: $2.99

Solution: The solution consists of 3 pages
Deliverables: Word Document