Solution:

Item odo. rdg. (x) retail val. (y) xy 𝒙𝟐 𝒚𝟐

1 13,000 52,275 679575000 169,000,000 2,732,675,625

2 18,000 51,525 927450000 324,000,000 2,654,825,625

3 20,000 51,200 1024000000 400,000,000 2,621,440,000

4 25,000 50,275 1256875000 625,000,000 2,527,575,625

5 29,000 49,625 1439125000 841,000,000 2,462,640,625

6 32,000 49,075 1570400000 1,024,000,000 2,408,355,625

Total 137,000 303,975 6,897,425,000 3,383,000,000 15,407,513,125

a. Find the linear regression.

𝒏(∑ 𝒙𝒚) − (∑ 𝒙)(∑ 𝒚)

𝒎= = −𝟎. 𝟏𝟕𝟎𝟏
𝒏(∑ 𝒙𝟐 ) − (∑ 𝒙)𝟐

∑𝑥
𝑥 𝑏𝑎𝑟 = = 𝟐𝟐𝟖𝟑𝟑. 𝟑𝟑𝟑𝟑
6
∑𝑥
𝑦 𝑏𝑎𝑟 = = 𝟓𝟎𝟔𝟔𝟐. 𝟓
6
𝑏 = 50662.5 + 0.1701 ∗ 22833.3333 = 𝟓𝟒𝟓𝟒𝟓. 𝟓𝟖𝟓𝟑

Answer:

𝒚 = −𝟎. 𝟏𝟕𝟎𝟏𝒙 + 𝟓𝟒𝟓𝟒𝟓. 𝟓𝟖𝟓𝟑

b. Use the equation from part (a) to predict the retail price of the model car with an odometer
reading of 30,000.

𝑦 = −0.1701 ∗ 30000 + 54545.5853 = 𝟒𝟗𝟒𝟒𝟑. 𝟕𝟐𝟏𝟒

c. Find the linear correlation coefficient for these data.

𝑛(∑ 𝑥𝑦) − (∑ 𝑥)(∑ 𝑦)

𝑟= = −𝟎. 𝟗𝟗𝟗𝟑
[𝑛(∑ 𝑥 2 ) − (∑ 𝑥)2 ]1/2 [𝑛(∑ 𝑦 2 ) − (∑ 𝑦)2 ]1/2