The State University Credit Union, a savings institution open to the faculty and staff of State University,

Question:

The State University Credit Union, a savings institution open to the faculty and staff of State University, handles savings accounts and makes loans to members. In order to plan its investment strategies, the credit union requires both point and prediction interval forecasts of monthly loan requests (in thousands of dollars) to be made by the faculty and staff in future months. The credit union has recorded monthly loan requests for its past two years of operation. These loan requests are given in the page margin. If we use MINITAB to fit the model
yt = Î²0 + Î²1t + Î²2t2 + Îµ
to these data, we obtain the following partial MINITAB output.

a. Does the quadratic term t2 seem important in the model? Justify your answer.
b. At the bottom of the MINITAB output are point and prediction interval forecasts of loan requests in months 25 and 26. Find and report these forecasts. Then show how the point forecasts have been calculated.