Below You Are Given Information on a Woman's Age and Her

question 91

Essay

Below you are given information on a woman's age and her annual expenditure on purchase of books.
$\begin{array}{ll}\text { Age }&\text { Annual Expenditure \$) }\\18 & 210 \\22 & 180 \\21 & 220 \\28 & 280\end{array}$
a. Develop the least squares regression equation.
b. Compute the coefficient of determination.
c. Use a t test to determine whether the slope is significantly different from zero. Let α = 0.05.
d. At 95% confidence, perform an F test and determine whether or not the model is significant.

---

Definitions:

Present Value

The present value of a future amount of money or series of cash flows, using a certain return rate.

Payment Options

The various methods by which a buyer can fulfill a financial obligation to a seller, including cash, credit, and electronic transfers.

Compounding

The process where the value of an investment increases because the interest it earns itself earns interest.

Discounting

The process of determining the present value of a payment or series of payments that will be made in the future, often used in finance to compare investment opportunities.