Figure A contains the selling price and area (in square feet) of 81 recently sold homes in a region where a buyer wants to purchase a home.
a. Use the equation to estimate the price of a home with 2500 square feet.
b. The buyer wants to know the uncertainty in the prices he might pay for a home with 2500 square feet in this region. Should he use a prediction interval or a confidence interval? Explain.
c. Report the correct 95% interval, confidence or prediction as determined in part b, for the predicted price. See Figure B.
d. The buyer has prequalified for a loan up to $400,000. Is he likely to be able to afford a house in this area with 2500 square feet?

  • CreatedJuly 16, 2015
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