Consider the data in the Excel file Consumer Price Index. Use simple linear regression to forecast the data. What would be the f
orecasts for the next two months? (Your regression equation should be look like CPI = a + b T. The T is year and 1990=1; 1991=2; 1992=3; 1993=4; 1994=5; 1995=6; 1996=7; 1997=8; 1998=9; 1999=10) Year CPI 1990 169.3 1991 170.0 1992 172.4 1993 175.3 1994 177.2 1995 176.8 1996 179.1 1997 180.1 1998 ? 1999 ?
1 answer:
Answer:
CPI(1998) = 182.32
CPI(1999) = 183.94
Explanation:
1.
Using excel regression analysis, the regression results are below:
This gives regression equation as: CPI = 167.73 + 1.62T
Kindly check the attached image below for the step by step explanation.
In order to find CPI values for 1998 and 1999, substitute value of T = 9 and 10 respectively
This gives:
CPI(1998) = 182.32
CPI(1999) = 183.94
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Where:
A is the amount you will have.
P is the money you are investing.
r: is the interest rate (in decimals)
n: number of times the interest is compounded per year
t: time (in years)
The first thing is converting the rate from percentage to decimal:
Since the interest is compounded every month and a year has 12 months n=12.
Now we can replace the values in our formula:
We can simplify the exponents to get:
Finally, we can use our calculator to get 288463.33
After 18 your balance in your bank account will be $288463.33