A person has money worries and decides to invest in the computer industry. They want to know how the value will change over time. They used an exponetial regression model where the predictor is time in months and the response var is money measure in thousands of dollars.
Alpha 4.2 and Beta is 1.03 Based on this model, how much money (in thousands) will he have after six months?
Workings 6-4.2*1.03 = 1674x1000=1674000 so where am I going wrong with this as I do not fully understand the question and need someone to explain this as a point for future reference if it came up again.
To understand the question, it seems that the person in the scenario wants to predict the value of their investment in the computer industry over time. They are using an exponential regression model, where the predictor is time in months, and the response variable is the value of their investment in thousands of dollars.
Now, let's break down the given information:
- Alpha (α) is the intercept of the exponential regression model, representing the value of the investment when the predictor (time) is 0.
- Beta (β) is the growth rate of the exponential regression model, indicating how much the value of the investment increases as time increases.
To find the expected value of the investment after six months, you need to plug in the values from the regression model and do the calculations correctly.
The formula for the exponential regression model is:
y = α * e^(β * x)
Where:
- y is the value of the investment in thousands of dollars.
- x is the number of months.
Based on the given information, the formula for this person's investment can be written as:
y = 4.2 * e^(1.03 * x)
Now, calculating the value of the investment after six months:
x = 6 (months)
y = 4.2 * e^(1.03 * 6)
y ≈ 4.2 * e^(6.18)
y ≈ 4.2 * 485.935
y ≈ 2040.183 (thousands of dollars)
So, according to the exponential regression model, this person will have approximately $2,040,183 after six months.
Looking at your calculations, it seems that there is an error in the equation you used. Instead of subtracting 4.2 * 1.03 from 6, you need to multiply the time value (6) by 1.03 and subtract the result from 4.2. Additionally, it seems you multiplied by 1000 at the wrong point in your calculations.