Question

+ Background Layout - Theme Transition 1. 2 13 14 56 7 B Age Money in Linear regression equation. y= 267.24x - 2421.14 (years) Savings Account ($) 25 8,761 a) Determine the predicted savings if you are 25 years old. Round your answer to the nearest thousandth. 72 24,900 16 1,980 55 19,865 b) Determine the residual value of a 25 year old. What does it mean? 34 3,250 46 6,843 63 832 add speaker notes 2:36 PM 10/27/2020 7

Answer 1

Answer:

The predicted savings = $4259.9 ( to the nearest tenth)

Residual value = $4501.14

Explanations:

Using the given equation for linear regression:

y = 267.24x - 2421.14

Where y represents the money in the savings account

and x = Age (years)

a) The predicted savings for an age of 25 years

x = 25

Substituting the value of x into the given equation:

y = 267.24(25) - 2421.14

y = 6681 - 2421.14

y = 4259.86

The predicted savings = $4259.9 ( to the nearest tenth)

b) The residual value of a 25 year old will be the difference between the actual saving and the predicted savings

From the table, actual savings of a 25 year old = $8761

Predicted savings = $4259.9 ( to the nearest tenth)

Residual value = Actual savings - Predicted Savings

Residual value = $8761 - $4259.9

Residual value = $4501.1