Consider the following data
| Year | 2012 | 2013 | 2014 | 2015 | 2016 |
| Production (in tonnes) | 15 | 20 | 25 | 30 | 35 |
The equation of straight line trend by method of least squares is :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → $y = 25 + 5x$
The general form of the trend line equation is,
$y=a+bx$
x = year - 2014
$⇒x=-2,-1,0,1,2$
∴ The product values (y) remain the same,
$y=15,20,25,30,35$
$∑x=(-2)+(-1)+0+1+2=0$
$∑y=15+20+25+30+35=125$
$b=\frac{∑xy}{∑x^2}=\frac{50}{10}=5$
$a=\frac{∑y}{n}=\frac{125}{5}=25$
$y=25+5x$