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Prediction Intervals
12. Regression / Prediction Intervals / Problem 7
Problem 7

Researchers analyzed the relationship between the average price of a used car (in units of thousands of dollars) and the average price of a new car (in units of thousands of dollars) over 1212 years. The regression equation is y^=5.2+0.6x \hat{y} = 5.2 + 0.6x , with xˉ=28 \bar{x} = 28 , yˉ=21 \bar{y} = 21 , (xixˉ)2=144 \sum (x_i - \bar{x})^2 = 144 , and se=1.8 s_e = 1.8 . Find the 95%95\% prediction interval for the average used car price when the new car price is $32,000\$32,000. (Use t10,0.025=2.228 t_{10, 0.025} = 2.228 ).