They used an exponential 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?
I am confused by this and need some help with the formula can anyone help explain this to me.
To answer this question, you need to use the exponential regression model with the given values of alpha (4.2) and beta (1.03).
In general, an exponential regression model can be expressed as follows:
y = α * exp(β * x)
Where:
- y represents the response variable (money measure in this case)
- x represents the predictor variable (time in months)
- α represents the intercept or starting value of y when x is 0
- β represents the rate of change or growth factor of y with respect to x
In this case, the formula can be written as:
money = 4.2 * exp(1.03 * time)
To find the amount of money (in thousands) after six months, substitute the value of time (6) into the formula:
money = 4.2 * exp(1.03 * 6)
To calculate this using a calculator or software, you need to use the exponential function (exp) and perform the multiplication:
money = 4.2 * 2.835036
The result is approximately 11.9.
Therefore, based on the exponential regression model, the person will have approximately $11,900 (in thousands) after six months.