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Forecast values using multiple regression models.
A air conditioning and heating repair firm conducted a study to determine if the outside temperature, thickness of the insulation and age of the equipment could be used to predict the cost of an electric bill for homes during the winter months in Houston. Texas. The resulting regression equation was:Y = 256.89 - 1.45 X1 - 11.26X2 - 6.10X3, where y = monthly cost,X1 = temperature, X2 = insulation thickness, X3 = age of equipment
(a) If December has an average temperature of 45 degrees and the heater is 2 years old with insulation that is 6 inches thick, what is the forecasted monthly electric bill?
(b) If January has an average temperature of 40 degrees and the heater is 12 years old with insulation that is 2 inches thick, what is the forecasted monthly electric bill?
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