Target Exam

CUET

Subject

-- Applied Mathematics - Section B2

Chapter

Index Numbers and Time Based Data

Question:

Consider the following data :

Year 2008 2009 2010 2011 2012
Profit (in lakh ₹) 10 12 15 20 25

The best fitted trend line equation by the method of least squares is :

Options:

$y=3.8 + 16.4 x$

$y=16.4+5.8x$

$y=3.4+6.4x$

$y=8.8+3.8x$

Correct Answer:

$y=8.8+3.8x$

Explanation:

The correct answer is Option (4) → $y=8.8+3.8x$

The linear regression equation is,

$y=a+bx$

$∑X=0+1+2+3+4=10$

$∑Y=10+12+15+20+25=82$

$∑X^2=0^2+1^2+2^2+3^2+4^2=30$

$∑XY=(0×10)+(1×12)+(2×15)+(3×20)+(4×25)=202$

$b=\frac{n∑XY-(∑X)(∑Y)}{n∑X^2-(∑X)^2}=\frac{190}{50}=3.8$

$a=\frac{∑Y-b∑X}{n}=\frac{82-3.8×10}{5}=8.8$