The table below shows the monthly income (in rands) of 6 different people and the amount (in rands) that each person spends on the monthly repayment of a motor vehicle.
1.1 Determine the equation of the least squares regression line for the data. (3)
1.2 If a person earns R14 000 per month, predict the monthly repayment that the person could make towards a motor vehicle. (2)
1.3 Determine the correlation coefficient between the monthly income and the monthly repayment of a motor vehicle. (1)
1.4 A person who eams R18 000 per month has to decide whether to spend R9 000 as a monthly repayment of a motor vehicle, or not. If the above information is a true representation of the population data, which of the following would the person most likely decide on:
A. Spend R9 000 per month because there is a very strong positive correlation between the amount earned and the monthly repayment.
B. NOT to spend R9 000 per month because there is a very weak positive correlation between the amount earned and the monthly repayment
C. Spend R9 000 per month because the point (18 000 ; 9 000) lies very near to the least squares regression line.
D. NOT to spend R9 000 per month because the point (18 000 ; 9 000) lies very far from the least squares regression line. (2)
[8]