An economist want to determine the relation between one's FICO score, x, and the interest rate of a 36-month auto loan, y. The given data represent the interest rate (in percent) a bank would offer on a 36-month auto load for various FICO scores. Credit Interest Rate Score;x (percent);y 545 18.982 595 17.967 12.218 8.612 705 6.68 750 5.15 1. Find the least-squares regression line treating the FICO score as the explanatory variable and the interest rate as the response variable. 2. Predict the interest rate a person would pay if their FICO score were the median score of 723. 640 675
An economist want to determine the relation between one's FICO score, x, and the interest rate of a 36-month auto loan, y. The given data represent the interest rate (in percent) a bank would offer on a 36-month auto load for various FICO scores. Credit Interest Rate Score;x (percent);y 545 18.982 595 17.967 12.218 8.612 705 6.68 750 5.15 1. Find the least-squares regression line treating the FICO score as the explanatory variable and the interest rate as the response variable. 2. Predict the interest rate a person would pay if their FICO score were the median score of 723. 640 675
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
Related questions
Question
![### Relationship Between FICO Score and Auto Loan Interest Rate
An economist aims to determine the relationship between one's FICO score (x) and the interest rate of a 36-month auto loan (y). The given data represent the interest rate (in percent) a bank would offer on a 36-month auto loan for various FICO scores.
| Credit Score (x) | Interest Rate (percent, y) |
| ---------------- | -------------------------- |
| 545 | 18.982 |
| 595 | 17.967 |
| 640 | 12.218 |
| 675 | 8.612 |
| 705 | 6.68 |
| 750 | 5.15 |
### Tasks:
1. **Find the least-squares regression line**
- Treat the FICO score as the explanatory variable and the interest rate as the response variable.
2. **Predict the interest rate**
- Estimate the interest rate a person would pay if their FICO score were the median score of 723.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faddcfefe-79de-4bfb-b00e-9692daf48932%2F2e6ccc9f-5ae9-49a7-b708-8f844ab0d3d2%2Fewqkelb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### Relationship Between FICO Score and Auto Loan Interest Rate
An economist aims to determine the relationship between one's FICO score (x) and the interest rate of a 36-month auto loan (y). The given data represent the interest rate (in percent) a bank would offer on a 36-month auto loan for various FICO scores.
| Credit Score (x) | Interest Rate (percent, y) |
| ---------------- | -------------------------- |
| 545 | 18.982 |
| 595 | 17.967 |
| 640 | 12.218 |
| 675 | 8.612 |
| 705 | 6.68 |
| 750 | 5.15 |
### Tasks:
1. **Find the least-squares regression line**
- Treat the FICO score as the explanatory variable and the interest rate as the response variable.
2. **Predict the interest rate**
- Estimate the interest rate a person would pay if their FICO score were the median score of 723.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![MATLAB: An Introduction with Applications](https://www.bartleby.com/isbn_cover_images/9781119256830/9781119256830_smallCoverImage.gif)
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
![Probability and Statistics for Engineering and th…](https://www.bartleby.com/isbn_cover_images/9781305251809/9781305251809_smallCoverImage.gif)
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
![Statistics for The Behavioral Sciences (MindTap C…](https://www.bartleby.com/isbn_cover_images/9781305504912/9781305504912_smallCoverImage.gif)
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
![MATLAB: An Introduction with Applications](https://www.bartleby.com/isbn_cover_images/9781119256830/9781119256830_smallCoverImage.gif)
MATLAB: An Introduction with Applications
Statistics
ISBN:
9781119256830
Author:
Amos Gilat
Publisher:
John Wiley & Sons Inc
![Probability and Statistics for Engineering and th…](https://www.bartleby.com/isbn_cover_images/9781305251809/9781305251809_smallCoverImage.gif)
Probability and Statistics for Engineering and th…
Statistics
ISBN:
9781305251809
Author:
Jay L. Devore
Publisher:
Cengage Learning
![Statistics for The Behavioral Sciences (MindTap C…](https://www.bartleby.com/isbn_cover_images/9781305504912/9781305504912_smallCoverImage.gif)
Statistics for The Behavioral Sciences (MindTap C…
Statistics
ISBN:
9781305504912
Author:
Frederick J Gravetter, Larry B. Wallnau
Publisher:
Cengage Learning
![Elementary Statistics: Picturing the World (7th E…](https://www.bartleby.com/isbn_cover_images/9780134683416/9780134683416_smallCoverImage.gif)
Elementary Statistics: Picturing the World (7th E…
Statistics
ISBN:
9780134683416
Author:
Ron Larson, Betsy Farber
Publisher:
PEARSON
![The Basic Practice of Statistics](https://www.bartleby.com/isbn_cover_images/9781319042578/9781319042578_smallCoverImage.gif)
The Basic Practice of Statistics
Statistics
ISBN:
9781319042578
Author:
David S. Moore, William I. Notz, Michael A. Fligner
Publisher:
W. H. Freeman
![Introduction to the Practice of Statistics](https://www.bartleby.com/isbn_cover_images/9781319013387/9781319013387_smallCoverImage.gif)
Introduction to the Practice of Statistics
Statistics
ISBN:
9781319013387
Author:
David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:
W. H. Freeman