Question 1

a)
age x 8 3 6 5 5 2 8 10 9 8 2 3 2 2
cost 6 18 1 7 1 16 3 3 7 9 11 1 15 2
0 1 0 0

n ∑ xy−∑ x ∑ y
r=
√ n ∑ x 2−(∑ x)2 ¿¿ ¿
❑ 2
∑y ∑x ∑y ∑ xy
2 ❑
∑x ❑

146 493 1880 595 73

n ∑ xy−∑ x ∑ y
r=
√ n ∑ x 2−(∑ x)2 ¿¿ ¿

14 ( 595 ) 73(146)
r=
√ 14 ( 493 )−73 ¿ ¿ ¿
2

−2328
r=
√(1573)(5004 )

r =−0.82977427

The coefficient of determination is r 2

∴ → -0.82977427
r
2
=0.6885
68.85% of the variation in estimated price is explained by the
age of the car.
There is positive association between the age and cost is positive
and fair.

b) y=a+bx

∑ y−b ∑ x
a=
n

146−(−1.4799745671 )
a=
14

254.0381437
a=
14

a = 18.14558169

n ∑ xy−∑ x ∑ y
b= 2
∑ n x −¿ ¿
14(595)−106.58
= 14 (493)−(73)²
8330−10659
= 1573
−2328
= 1573

b = 1.479974571
equation is = y = 18.1456 + (1.479974571) x
y = 18.1456 – 1.4794
cost of a four-year-old car
y when x = 4 ∴ y = 18.1456 + (1.479974571) (4)
y = 18.1456 – 5.9196
y = 12.226
the cost of a four car is 12.226
the slope coefficient of the regression equation they contain a
negative relationship as ‘b’ represents the coefficient of the
equation.

Question 2
a)

toothpaste
shampoo
coughdrops
toilet-paper
 ∑ PnQo
Laspeyre price index. LPI = ¿
∑ PoQo 100

53.91
= ¿
36.35 100

= 147.0941337

∑ PnQn
Paasche price index PPI = ¿
∑ PoQn 100

65.08
= ¿
43.32 100

= 150.2308403

Fisher idel index = √ LP ⁰¹ +¿ PP ⁰¹ ¿

√ 147.09+¿ 150.2308 ¿

= 145.6
b)
 i. The cpl of 1445.21 show there was a high rate of infla-
tion from 2019 to 2020
ii. The purchasing power of the ZWL$ in June 2020,
based on the period February 2019

38.8
Change in the Cpl ¿ 2

100
= 1445.2
∗100

= 0.069194575 * 100
= 6.919457515%
= 6.9195%

Purchasing power = 100-6.9193

= 93.0805%

This means that the dollar has 93.0805% less purchas-

ing power in 2018 compared to February 2019
You will need $1445.5 to purchase what cost $1 in
2019
1445.5
= 100 ∗21

iii. The employee’s real monthly income for June 2020

12000
= 1445.21
∗100

= 830.33
 This show that there are high rates of inflation and
there are low levels of living standards as compared to
2019.

QUESTION 3
a) H ₀: P=0
H ₁: P ≠ 0

We use t distribution
Critical value: two tailed tes

t 0.5(14-2) = t (12) = 0.78

00.5
 r
t 0.05=
√( 1−r )−1 n−2
2

−0.82977427
¿
√0.311474661/12

0.82977427
= 0.161109347

= -5.15037945
= -5.1504
we accept H ₀ since -5.1504 ˂ 1.78
conclusion: the age and cost are not correlated.
b)
(165.28 )−21(46.95)
b=
6 ( 91 )−(441)
5.73
= 546−441
5.73
= 105

= 0.054571428
= 0.0546

∑ y−b ∑ x
a=
n
49.95−0.0546(21)
6
49.95−1.1466
6
45.8034
6
 = 7.6339
7.6339 + 0.054571 x
^y = 7.6339 + 0.054571 x

c) y when x=2
y = 7.63 + 0.0546(2)
= 7.739

y when x=6

= 7.63 + 0.0546(6)
= 7.957
(2:7.739)
(6:7.957)

Year 2012 2013 2014 2015 2016 2017

sales 7.45 7.83 8.07 7.94 7.76 7.90

Data
 Chart Title
8.2
8.07
0

8 7.94
0
7.9
0
7.83
0
7.8 7.76
0

7.6
7.45
0
7.4

7.2

7
2012 2013 2014 2015 2016 2017

y=a+bx

∑ x=¿21
∑ x = 91
2

∑ xy = 165.28
∑ y=¿ 46.95
(∑ x )² = 441

n ∑ xy−∑ x ∑ y
b= 2
n ∑ x −¿ ¿