Asked Jan 16, 2020

Tips Using the bill/tip data, find the best predicted tip amount for a dinner bill of $100. What tipping rule does the regression equation suggest?

Bill (dollars)
Tip (dollars)

Image Transcriptionclose

107.34 63.60 Bill (dollars) Tip (dollars) 50.68 98.84 33.46 87.92 16.00 12.00 17.00 5.00 5.50 8.08


Expert Answer

Step 1


The regression analysis is conducted here by using EXCEL. The software procedure is given below:

  • Enter the data.
  • Select Data > Data Analysis > Regression> OK.
  • Enter Input Y Range as Tip (dollars).
  • Enter Input X Range as Bill (dollars).
  • Click OK.

The output using EXCEL is as follows:

Statistics homework question answer, step 1, image 1
Step 2

From the output, regression equation is, Tip = –0.35+0.15(Bill).

Strategy for Predicting the y value:

Analyze the below mentioned conditions for predicting the y value.


  • In scatterplot, the regression line fits the point well.
  • The value of r indicates that there is a linear correlation between the variables.
  • The prediction value is not away from the range of the given sample data.


If the regression equation satisfies the above mentioned conditions, then the regression is said to be a good model. Here, substitute the given value of x into the regression equation to predict the value of y.

If the regression equation does not satisfy the above conditions, then the regression is not a good model. Here, the best predicted value of y is the value of.

The scatter diagram, along with the best fitted line (least-squares regression line) for the data is as follows:

Statistics homework question answer, step 2, image 1
Step 3

The horizontal axis represents bill and the vertical axis represents tip.

From the plot, it is observed that the regression line fit the points well.

Correlation coefficient r:

The hypotheses are given below:

Null hypothesis:

H0: r = 0

That is, there is no linear correlation between the bill and tip amounts.

Alternative hypothesis:

Ha: r≠ 0

That is, there is a linear correlation between the bill and tip amounts.

Sample correlation coefficient:

The value of the sample correlation coefficient (r) can be obtained using Excel formula.

Enter the function, =CORREL(A2:A7,B2:B7).

Thus, the value of the sample correlation coefficient, r is 0.828.


The P-value is 0.042 and the level of...

Statistics homework question answer, step 3, image 1

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