14. Managing Your Money A savings and loan corporation wants to find out if the amount of money in family savings accounts can be predicted using three independent variables—annual income, number in the family unit, and area in which the family lives.

There are two specific areas of interest to the corporation.

The following data were collected, where

The following computer printout resulted when the data were analyzed.

a. Interpret R2 and comment on the fit of the model.

b. Test for a significant regression of y on 1 x , 2 x , and 3 x at the 5% level of significance.

c. Test the hypothesis : 0 0 3 H b 5 against H :b ? 0 a 3 using a 5.05. Comment on the results of your test.

d. What can be said about the utility of 3 x as a predictor variable in this problem?

Transcribed Image Text:

y= Amount in all savings accounts x = Annual income = x2 Number in family unit x = 0 if in Area 1; 1 if not Both y and x, were recorded in units of $1000. y x X X3 0.5 19.2 3 0 0.3 23.8 6 0 1.3 28.6 5 0 0.2 15.4 4 0 5.4 30.5 3 1 1.3 20.3 2 1 12.8 34.7 2 1 1.5 25.2 4 1 0.5 18.6 3 1 15.2 45.8 2 1