If the least squares equation for sales data is ŷ = 10 + 1.3t ($ millions),with t = 0 in 1995, what is the value of t and the forecast for 2002?
A) t = 6, y = 17.8
B) t = 0, y = 10.0
C) t = 7, y = 19.1
D) t = 10, y = 0.0
E) t = 7, y = 9.1

Question

Quizplus · Accepted Answer

The equation is in the form ŷ = a + bt, where a = 10 and b = 1.3. We are given that t = 0 in 1995, so in 2002 (when t = 7), we can plug in 7 for t to get:

ŷ = 10 + 1.3(7) = 19.1

Therefore, the forecast for 2002 is $19.1 million in sales.

If the Least Squares Equation for Sales Data Is ŷ