Question

Juanita Cash, the operations planner for the First State Savings and Loan, is planning the next quarter's level of deposits. She suspects that First State's level of deposits is directly related to the interest rate paid. The recent historical data are as follows.

Regression Statistics

Multiple R 0.995047482
R Square 0.990119491
Adjusted R Square 0.987649363
Standard Error 0.503701313
Observations 6


ANOVA
df SS MS
Regression 1 101.6984733 101.7
Residual 4 1.014860051 0.2537
Total 5 102.7133333


Coefficients Standard Error t Stat

Intercept -39.5559796 2.749298366 -14.39
Interest Rate % X 11.14503817 0.556669499 20.021


For each one percent increase in the interest rate, by how much do the deposits increase?

Answer 1

For each one percent increase in the interest rate, amount of deposit increases by 11.145%

Step-by-step explanation:

To obtain the amount rate at which deposit increase per percentage increase in interest rate ;

We obtain the slope Coefficient of the regression equation between the amoub of deposit and interest rate paid.

From the result of the analysis given ;

The slope Coefficient of X, interest rate % is 11.145

Hence, For each one percent increase in the interest rate, amount of deposit increases by 11.145%