Problem:
The following table shows the annual maintenance costs for several cars, as well as their age.
|
age of car
|
annual expenses ($)
|
|
1
|
100
|
|
2
|
375
|
|
2
|
325
|
|
3
|
455
|
|
3
|
520
|
|
4
|
485
|
|
4
|
530
|
|
5
|
595
|
|
5
|
515
|
|
6
|
700
|
|
6
|
800
|
|
7
|
1000
|
|
7
|
950
|
Required:
Question 1: Develop a regression model that relates maintenance costs (dependent variable) as a function of age (independent variable). What are the regression-equation parameters?
Question 2: Predict the annual cost of maintaining an eight-year-old car.
Note: Show supporting computations in good form.