Write a linear equation to find the price p of a share of XYZ Corporation stock w weeks from now. Estimate the price of a share of stock five weeks ago.

Question

The price of a share of stock in XYZ Corporation was $74 two weeks ago. Seven weeks ago, the price was $59 a share.

Answer 1

The equation of a line is:

 

y = mw + b

 

where y = the price of the stock, w = weeks, m is the slope and b is the y-intercept.  You have two points, (-7,59) and (-2,74), which is all you need to specify a line.  The slope is:

 

m = (74-59)/(-2-(-7)) = 15/5 = 3

 

so the equation so far is:

 

y = 3w + b

 

To find b, plug in either known point:

 

y = 3w + b

74 = 3(-2) + b

74 = -6 + b

80 = b

 

The full equation is:

 

y = 3w + 80