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Table A contains the value of the house and the amount of rental income in a year that the house brings in

Table A contains the value of the house and the amount of rental income in a year that the house brings in: Expert Solutions for Success

Table A contains the value of the house and the amount of rental income in a year that the house brings in. Find the correlation coefficient and coefficient of determination and then interpret both.

Table #A: Data of House Value versus Rental

Value	Rental	Value	Rental	Value	Rental
81000	6656	77000	4576	75000	7280
95000	7904	94000	8736	90000	6240
121000	12064	115000	7904	110000	7072
135000	8320	130000	9776	126000	6240
145000	8320	140000	9568	140000	9152
165000	13312	165000	8528	155000	7488
178000	11856	174000	10400	170000	9568
200000	12272	200000	10608	194000	11232
214000	8528	208000	10400	200000	10400
240000	10192	240000	12064	240000	11648
289000	11648	270000	12896	262000	10192
325000	12480	310000	12480	303000	12272

Answer

The Correlation coefficient calculated as
Let X to be the House value and Y to be the rental income

Hence Coefficient if determination calculated as

0.5697 or 56.97%

Interpretation:

R -squared is statistical measure which shows that how close is our values to the best fitted line or we can say that how the values is correlated to each other. Here value of house is 56.97% somewhat related to Rental.

The correlation coefficient is used to show how strong or weak the explanatory variable is related to the response variable. It is also used to show whether their relationship is direct or inversely relation by indicating a positive value of r for direct relation and negative value of r for inverse relation of the variables. In this case, r = 0.7548 shows a fairly strong positive linear relationship between house value and rental income.

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Table A contains the value of the house and the amount of rental income in a year that the house brings in: Expert Solutions for Success

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