Personal wealth tends to increase with age as older individuals have had more opportunities

to earn and invest than younger individuals. The following data were obtained from a random

sample of eight individuals and records their total wealth (Y) and their current age (X).

Person Total wealth ('000s of dollars) Y Axis Age (Years) X Axis

A 280 36

B 450 72

C 250 48

D 320 51

E 470 80

F 250 40

G 330 55

H 430 72

State the estimated regression line and interpret the slope coefficient.

b. What is the estimated total personal wealth when a person is 50 years old?

c. What is the value of the coefficient of determination? Interpret it.

d. Test whether there is a significant relationship between wealth and age at the 10% significance level. Perform the test using the following six steps.

Step 1. Statement of the hypotheses

Step 2. Standardised test statistic

Step 3. Level of significance

Step 4. Decision Rule

Step 5. Calculation of test statistic

Step 6. Conclusion