Question: Sruti Singh (see Problem) would like to investigate the effect of adding the age of the car (in years) to the regression model. The table in Problem 33 includes the ages of the original 10 cars.
(a) Develop a multiple regression model to predict the market value of a Volkswagen Golf based on its mileage and age.
(b) What percentage of the selling price variation is explained by this expanded model?
(c) The car that Sruti found with 46,700 miles is 5 years old. What is the revised 95% confidence interval for the market value of this car? Explain why this interval is different from the one in Problem 33(c).
Problem: Sruti Singh is shopping for a used Volkswagen Golf and feels that there is a relationship between the mileage and market value of the car. The following table provides data on previous car sales from the local area:
(a) Develop a simple regression model to predict the market value of a Volkswagen Golf based on its mileage.
(b) What percentage of the market value variation is explained by the mileage variable?
(c) Sruti has found a car with 46,700 miles. Construct a 95% confidence interval for the market value of this car.