Question

9. Fit a straight line trend by the method of least square to the following data :
Year
Profit
1995
80
1996
90
1997
92
1998
83
1999
94
2000
99
2001
97
2002
104​

Answer 1

Explanation:

Computation of trend values by the method of least squares. (ODD years) Therefore, the required equation of the straight line trend is given by

Y = a + bX (i.e) Y = 169.429 + 3.286 X (or) Y = 169.429 + 3.286 (x – 1998) The trends values are obtained by

When x = 1995, Yt = 169.429 + 3.286 (1995 – 1998) = 159.57

When x = 1996, Yt = 169.429 + 3.286 (1996 – 1998) = 162.86

When x = 1997, Yt = 169.429 + 3.286 (1997 – 1998) = 166.14

When x = 1998, Yt = -169.429 + 3.286 (1998 – 1998) = 169.43

When x = 1999, Yt = 169.429 + 3.286 (1999 – 1998) = 172:72

When x = 2000, Yt = 169.429 + 3.286 (2000 – 1998) = 176.00

When x = 2001, Yt = 169.429 + 3.286 (2001 – 1998) = 179.29