The data referred to in this question were collected on 41 employees of a large company.The company is trying to predict the current salary of its employees from their starting salary (both expressed in thousands of dollars).The SPSS regression output is given below as well as some summary measures: John Doe works for this company.He started with a salary of $15,300.Predict his current salary with a 90% confidence interval.Express the interval in the appropriate units.
A)($15,683;$45,537)
B)($18,204;$43,015)
C)($28,580;$32,640)
D)($31,516;$32,885)

Question

The data referred to in this question were collected on 41 employees of a large company.The company is trying to predict the current salary of its employees from their starting salary (both expressed in thousands of dollars).The SPSS regression output is given below as well as some summary measures:     John Doe works for this company.He started with a salary of $15,300.Predict his current salary with a 90% confidence interval.Express the interval in the appropriate units.
A)($15,683;$45,537) 
B)($18,204;$43,015) 
C)($28,580;$32,640) 
D)($31,516;$32,885)

Quizplus · Accepted Answer

From the SPSS output, the regression equation is: 
predicted salary = 5.152 + 1.657(starting salary)

Substituting the given values for John Doe: 
predicted salary = 5.152 + 1.657(15.3) = $30,050.61

To find the 90% confidence interval, we need to use the formula: 
predicted salary ± (critical value)(standard error)

From the output, the standard error is 4.827 and the critical value for a 90% confidence interval with 39 degrees of freedom is 1.684.

Substituting these values: 
interval = $30,050.61 ± (1.684)(4.827) = ($18,203.77, $43,897.45)

So the answer is B: ($18,204;$43,015)

The Data Referred to in This Question Were Collected on 41