The multiple regression model represents pricing for residential housing in a certain market. Predicted Price ? = 19,856.56 + 6,985.25 bedrooms + 87.53 square foot. A house in the local market has 5 bedrooms and 3,500 square feet of living area. Use the multiple regression model to determine the predicted price and the residual if the house sells for $360,200
Predicted Price = $361,138, Residual = –$937.81
RATIONALE: Predicted Price ? = 19,856.56 + 6985.25 bedrooms + 87.53 square foot = 19,856.56 + 6985.25(5) + 87.53(3,500) = 361,137.81 . Residual = actual - predicted = 360,200 – 361,137.81 = –937.81.
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