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Running head: MATH 141 – Capstone Project 1

MATH 141 – Capstone Project 3

MATH 141 – Capstone Project

Name:

Busayo Oyewole

Instructor:

Professor Kimberly Triplet

Introduction

The car chosen for this paper is the 2018 Ford Fiesta. The make is Ford, and the model is the Fiesta. The MSRP (Manufacturer’s Suggested Retail Price) of the car for this year is $15,363. The key features for this car include performance, safety, the interior design, and reliability. On performance, the base engine is powerful together with its sharp handling as well as accurate steering. The ride is bumpy over uneven surfaces. The car has a standard 1.6-litre four-cylinder engine which generates 120 horsepower as well as adequate acceleration. Also, the car’s standard five-speed manual gearbox is easy to use. Thus, the car is good to use in bumpy or rough surfaces. According to the J.D. Power and Associates Vehicle Dependability Study (VDS) rating, the car is very reliable. The car has no history of safety recalls which are issued by NHTSA. Also, the car has a 36,000 mile or three years limited warranty as well as a 60,000 mile or five-year powertrain warranty (Kelley Blue Book Co. 2017).

According to National Highway Traffic Safety Administration safety ratings and Insurance Institute for Highway Safety crash test ratings, the car is very safe to use. The IIHS safety rating includes Side Impact Test Results (good), Moderate Overlap Front Test Results (good), Roof Strength Test Results (good), and Rear Crash Protection Results (good). Additionally, the car has a pleasant interior review. Options such as leather upholstery as well as heated front seats tend to improve the overall quality. The car has a keyless entry, 4.2-inch display, six-speaker audio system, and rear parking sensors, My Key, satellite radio, together with a rearview camera. There is also an ancillary jack for playing music and Bluetooth for making phone calls. These features make the car comfortable and entertaining to use (Kelley Blue Book Co. 2017).

The two local dealerships that sell the make and model of the car with the features include Academy Ford 13401 Baltimore Ave. Laurel MD, 20707, (877)894-4901 5300, and Eastern Automotive Group 9950 Washington Blvd N, Laurel, MD 20723 (888)493-2318

Data Collection

Year of Manufacture	Age of car	Price ($)
2018	0	12663
2017	1	10890
2016	2	8990
2015	3	7450
2014	4	5985
2013	5	6795
2012	6	4295
2011	7	5000
2010	8	3498
2009	9	3695
2008	10	2695
2007	11	2995

Source: Kelly Blue Book

Linear Regression Model and Graph

a) Scatter Plot

Ford Fiesta Depreciation Trend

a) Linear regression equation

The linear regression equation is

Discussion of the Regression Model

The vertical intercept is It is the mean fair purchase price value of Ford Fiesta at zero years. while the horizontal intercept is (0,13) This is the age of the car when its value will be zero. The slope is This is the rate of change of the fair purchase price with respect to the age of the car.

the predicted resale value of the car after 5 years of purchase is at $6,670. I do not expect all cars of different makes and models to have the same linear model. This is because they do not have the same MSRP. Also, some certain features may hold a better value.

It will not make sense to offer a car loan ranging up to 30 years since for most cars they will depreciate to zero before the period expires. For instance, Ford Fiesta will depreciate to zero after 13 years from the purchase date. Unlike houses, cars experience wears and tear, thus quickly losing their value.

References

Kelley Blue Book Co. (2017). Kelley blue book used car guide: Consumer edition, 2002-2016 models. https://www.ford.com/cars/fiesta/models/