Chapter 5.9, Problem 13AYU

(a)

To determine

To find: The scatter diagram of the given data by the use of age as the independent variable and price as the dependent variable.

Answer to Problem 13AYU

The required plot is shown in Figure 1

Explanation of Solution

Given:

The given table is shown in table 1

Table 1

Age(x)	Price (y)
1	27417
1	26750
2	22995
2	23195
3	17999
4	16995
4	16490

Calculation:

Consider the asking price as the dependent variable then the scatter plot for the function is shown in Figure 1

  

Figure 1

(b)

To determine

To find: The exponential model from the given data.

Answer to Problem 13AYU

The model seems to be the exponential function as the model is the theory of finance.

Explanation of Solution

From the graph shown in Figure 1, and the given data the model seems to be the exponential function as the model is the theory of finance.

(c)

To determine

To find: The expression for the best fit model.

Answer to Problem 13AYU

The required model is $y=31808.51{\left(0.8474\right)}^x$ .

Explanation of Solution

From the scatter plot shown in Figure 1, the best fit model is,

  $y=31808.51{\left(0.8474\right)}^x$

(d)

To determine

To find: The scatter plot for the best fit model.

Answer to Problem 13AYU

The best fit model is shown in Figure 2

Explanation of Solution

Consider the best fit model is,

  $y=31808.51{\left(0.8474\right)}^x$

The required plot is shown in Figure 2

  

Figure 2

(e)

To determine

To find: The prediction for the asking price of Chevrolet Impala SS that is 5 years old.

Answer to Problem 13AYU

Theasking price is $\$13899.07$ .

Explanation of Solution

Consider the best fit model is,

  $y=31808.51{\left(0.8474\right)}^x$

Then, the asking price of Chevrolet Impala SS that is 5 years old.

  $\begin{array}{c}y=31808.51{\left(0.8474\right)}^5\\ =\$13899.07\end{array}$