Question

In 2011 home prices and mortgage rates dropped so low that in a number of cities the monthly cost of owning a home was less expensive than renting. The following data show the average asking rent for 10 markets and the monthly mortgage on the median priced home (including taxes and insurance) for 10 cities where the average monthly mortgage payment was less than the average asking rent (The Wall Street Journal, November 26–27, 2011). Click on the webfile logo to reference the data

Answer 1

The linear regression equation that is used to predict the monthly mortgage given the rent is of:

Mortgage = 1.07 x Rent - 196.97.

How to obtain the equation of linear regression for a data-set?

To obtain the linear regression equation, also called line of best fit or least squares regression equation, we need to insert the points (input, output) that composed the data-set in a linear regression calculator. These points are given on a table or in a scatter plot in the problem.

The format of the points in this problem is given as follows:

(Rent, Mortgage).

Hence the points are given as follows, from the table given by the image at the end of the answer.

(840, 539), (1062, 1002), (823, 626), (779, 711), (796, 655), (1071, 977), (953, 776), (851, 695), (762, 651), (723, 654).

Inserting these points into a calculator, the equation is given as follows:

Mortgage = 1.07 x Rent - 196.97.

More can be learned about linear regression at brainly.com/question/26755306

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