Math Problem Statement
Solution
The image provided is related to a linear regression problem that models the value of an investment (in dollars) years after 1990.
From the problem, it looks like the task involves:
- Creating a linear regression model from the data in the table.
- Using that model to predict the value of the investment at different times.
- Calculating the rate at which the investment's value is decreasing.
Steps to solve:
-
Linear regression formula: The linear regression equation has the general form: where:
- is the value of the investment.
- is the number of years after 1990.
- is the slope (rate of decrease/increase per year).
- is the y-intercept (value at year 0, which is 1990).
-
Determine the slope (m): The slope is the rate at which the value decreases each year. We calculate the slope by taking two points from the table:
For example, using the points and :
= \frac{-6351.4}{18} = -352.86$$ -
Determine the y-intercept (b): Now, use the slope and one of the points to find . Using and :
-
Regression equation: The equation for the linear regression model is:
-
Value in 1990 (n = 0): Using in the regression equation: This is close to the provided answer of , so rounding explains the slight difference.
-
Rate of decrease: The slope of the line represents the rate of decrease per year. So, the investment is decreasing by approximately $352.86 per year.
Would you like a more detailed breakdown of any step or explanation?
Related questions:
- What would the value of the investment be after 10 years using this model?
- How does rounding affect the precision of the linear regression model?
- What happens to the investment if the rate of decrease changes in the future?
- Can the regression equation predict when the investment value will reach zero?
- How would different methods of regression (like quadratic) affect the outcome?
Tip: Always check multiple pairs of points when calculating the slope to ensure consistency and accuracy.
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Math Problem Analysis
Mathematical Concepts
Linear Regression
Algebra
Formulas
Linear regression equation: V(n) = mn + b
Slope formula: m = (V(n2) - V(n1)) / (n2 - n1)
Y-intercept formula: V(n) = mn + b
Theorems
Linear regression model
Slope-intercept form of a linear equation
Suitable Grade Level
Grades 9-12