Farmers National Bank issues MasterCard credit cards to its customers. A main factor in determining whether a credit card will be profitable to the bank is the average monthly balance that the customer will maintain on the card that will be subject to a finance charge. Bank analysts wish to determine whether there is a relationship between the average monthly credit card balance and the income stated on the original credit card application form. The following sample data have been collected from existing credit card customers:
Income Credit Balance
$43,000 $345
$35,000 $1370
$47,000 $1140
$55,000 $201
$55,000 $56
$59,000 $908
$28,000 $2,345
$43,000 $104
$54,000 $0
$36,000 $1,290
$39,000 $130
$31,000 $459
$30,000 $0
$37,000 $1,950
$39,000 $240
Run the regression model on excel to see if income can explain credit card balance and answer the following:
1. Write the regression equation,
2. Interpret the regression constant and regression coefficient,
3. Forecast a value for the dependent variable,
4. Test the significant of the regression coefficient at alpha = 0.05,
5. Test the overall significant of the regression model,
6. Interpret the coefficient of determination, and
7. Are there any indications of violations of the general linear model, be specific.
Please provide step by step excel solution.