square footage and rent per year in Dubai Case Study

Suppose the rent is represented by the variable Y, and the area is represented by X.

The below table needs to be completed by the data collected

i) Graph the scatter diagram of the data collected

ii) Determine the coefficient of correlation r , and deduce if the variables are linearly related

iii) Find the equation of the best-fitted regression line of the form

iv) The coefficient of determination R2 assesses the goodness of fit of the model obtained. The higher the value of R2 (it’s always between 0 and 1), the more the value of dependent variable can be easily predicted from the independent variable. The formula for R2 is given by:

Calculate R2 for this data set and interpret your answer.