Real estate prices. A regression was performed to predict selling Price of beach front vacation homes in dollars from their Area in square feet, Lotsize in square feet, and Age in years. The R2 is 90%. The equation from this regression is given here.

Price = 159,228 + 85.3 Area + 1.78 Lotsize - 7500 Age One of the following interpretations is correct. Which is it?

Explain what’s wrong with the others.

a) The value of a beach front home depreciates by $7,500 every year.

b) For homes with a given lot size and age, the price increases by $85.3, on average, for every additional square foot of area.

c) Every additional dollar in price means lot size increases 1.78 square feet.

d) This model fits 90% of the data points exactly.