A bank developed a model for predicting the average checking and savings account balance as balance = -18,751 +393 x age + 1,127 x years education + 0.129 x household wealth. a. Explain how to interpret the numbers in this model. b. Suppose that a customer is 29 years old, is a college graduate (so that years education = 16), and has a household wealth of $120,000. What is the predicted bank balance? a. The number - 18,751 does not have a meaningful interpretation. The number 393 means that the average account balance increases by $393 for each year increase in age. The number 1,127 means that the average account balance increases by $1,127 for each year increase in education. The number 0.129 means that the average account balance increases by $0.129 for each $1 increase in household wealth. b. The predicted bank balance is $ (Simplify your answer.)

A bank developed a model for predicting the average checking and savings account balance as balance = -18,751 +393 x age + 1,127 x years education + 0.129 x household wealth. a. Explain how to interpret the numbers in this model. b. Suppose that a customer is 29 years old, is a college graduate (so that years education = 16), and has a household wealth of $120,000. What is the predicted bank balance? a. The number - 18,751 does not have a meaningful interpretation. The number 393 means that the average account balance increases by $393 for each year increase in age. The number 1,127 means that the average account balance increases by $1,127 for each year increase in education. The number 0.129 means that the average account balance increases by $0.129 for each $1 increase in household wealth. b. The predicted bank balance is $ (Simplify your answer.)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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