The director of an alumni association for a university wants to look at the rela

Question

The director of an alumni association for a university wants to look at the relationship between the number of years since graduation and the amount of monetary contribution an alumnus makes to the university. He collects data on 50 alumni who have made contributions this year. The number of years since graduation has a mean of 5, and the amount of contribution has a mean of 183 dollars. Based on the least squares regression line fitted to the data, it is found that for every year increase since graduation, the contribution is expected to drop by 27 dollars. Predict the amount of contribution made by an alumnus who graduated 5 years ago. Do not round in intermediate steps. The predicted contribution of an alumnus who graduated 5 years ago is: (in dollars, rounded to one decimal place.)

Explanation / Answer

First we find the regression equation

Here b1 or slope is -27

Let Regreesion equation is Contribution = b0-27*(Years Since graduation)

b0 will be = 183-(-27*5) = 318

So, Equation is Contribution = 318-27*(Years Since graduation)

For Years Since graduation) = 5

Contribution = 318-27*5 = 183

So, answer is $183.0

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