To find the best fit linear regression equation using Excel, enter the data into a spreadsheet, create a scatter plot, add a linear trendline, and display the equation on the chart. The equation will be in the form y = mx + b, where m is the slope and b is the intercept. Round the slope and intercept values to two decimal places
To find the best fit linear regression equation using Excel, we can follow these steps:
1. Enter the data into an Excel spreadsheet. In this case, we have the values of 40 houses and the corresponding rental income in a year.
2. Select the data and go to the "Insert" tab in Excel. Choose the "Scatter" plot option to create a scatter plot of the data.
3. Right-click on one of the data points in the scatter plot and select "Add Trendline."
4. In the "Trendline Options" dialog box, select the "Linear" trendline type.
5. Check the box for "Display Equation on chart" and "Display R-squared value on chart" if desired.
6. Click on "Close" to see the linear regression equation and the R-squared value displayed on the chart.
The linear regression equation will be in the form of y = mx + b, where y represents the rental income and x represents the value of the house. The slope (m) and intercept (b) values will be rounded to two decimal places.
By following the steps above, you should be able to find the best fit linear regression equation using Excel.
The question probable may be :-
A real estate agent wants to predict the annual rental income of houses based on their valuation. They have collected data on 40 houses, including their value and the annual rental income generated. Your task is to use Excel to find the best-fit linear regression equation to estimate the rental income based on the house value. Round the slope and intercept of the equation to two decimal places. Additionally, analyze the strength and direction of the relationship between house value and rental income.