Used cars are often sold wholesale at auctions, and from these sales, retail sales prices are recommended.
The following table gives the recommended prices in 2009 for a four-door manual transmission Toyota Corolla based on the age of the car.
(a) Fit these data with a model of the form y = aebx. Graph the (xi,yi)’s and superimpose the least squares exponential curve.
(b) What would you predict the retail price of an eleven-year- old Toyota Corolla to be?
(c) The price of a new Corolla in 2009 was $16,200. Is that figure consistent with the widely held belief that a new car depreciates substantially the moment it is purchased? Explain.
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