1

A company wants to predict the annual value of its total sales based on the national income of the country where is does business. The relationship is represented in the following table:

X 189 190 208 227 239 252 257 274 293 308 316
Y 402 404 412 425 429 436 440 447 458 469 469

x represents the national income in millions of dollars and y represents the company's sales in thousands of dollars in the period from 1990 to 2000 (inclusive). Calculate:

1 The regression line of y on x.

2 The linear correlation coefficient and interpret it.

3 If in 2001, the country's national income was 325 million dollars, what would the prediction for the company's sales be?


xi yi xi ·yi xi2 yi2
189 402 35,721 161,604 75,978
190 404 36,100 163,216 76,760
208 412 43,264 169,744 85,696
227 425 51,529 180,625 96,475
239 429 57,121 184,041 102,531
252 436 63,504 190,096 109,872
257 440 66,049 193,600 113,080
274 447 75,076 199,809 122,478
293 458 85,849 209,764 134,194
308 469 94,864 219,961 144,452
316 469 99,856 219,961 148,204
2,753 4,791 708,933 2,092,421 1,209,720

Correlation and Regression Operations

Correlation and Regression Operations

Correlation and Regression Operations

Correlation and Regression Operations

Correlation and Regression Operations

Correlation and Regression Solution

Correlation and Regression Solution