Linear Regression

Question

Let y-hat represent the profit (or loss) for a certain company x years after 1975. Based on the data shown below, a statistician calculates a linear model y^= -0.71x + 14.39.

Use the model to estimate the profit in 1982. Round to the nearest cent.

Answer 1

Hi Bailey,

1982 would be 7 years after 1975, so substitute 7 in for x in your regression equation:

y-hat= -0.71(7) + 14.39

y-hat=9.42

Note that actual y was much higher. I hope this helps.