# statistics, pls help im stuck

#### tameika

##### New Member
Question
A major financical institution would like to predict its loan degault rate
based on the interest rate it charges. A random sample of eight loans
showed the following rates and default rates:

Interest Default Rate
Rate % per 1000 Loans
(X) (Y)
5.0 36
4.6 38
4.0 33
6.5 44
6.0 46
5.5 37
4.5 34
5.0 35
The regression line to explain 'Default Rate' from 'Interest Rate' has been
calculated as:
y=12.3562 + 4.96717x

You may use the following sums and sums of squares and cross products:
{x=41.1 {y=303 SS(x)=4.75875 SS(y)=154.875 SS(xy)=23.6375

Provide a 90% prediction interval for the default rate per 1000 loans when
teh interest rate is 5.5%

WORK DONE:

Y=12.3562 + 4.96717x
Y=(Xo=5.5)=12.3562 + 4.96717 * 5.5=39.675635

a 90% prediction interval for the default rate per 1000 loans is:
Y (Xo) plus/minus t6;_____(I DONT KNOW HOW TO GET THE VALUE FOR THIS)

This is where i get stuck. I dont know how to get the value nor how to
continue. I tihnk its one of the tables but i dont know which one.

Pls help.

Last edited:

#### vinaitheerthan

##### New Member
Hi,
To get a prediction interval for you will have to use the following equation
^
y + t n-2 * sqrt[(standard error of predicted value)^2 + (standard error of the estimate)^2]
-
^

Regards
Re.Vinaitheerthan

#### sweetx

##### New Member
Hi,
To get a prediction interval for you will have to use the following equation
^
y + t n-2 * sqrt[(standard error of predicted value)^2 + (standard error of the estimate)^2]
-
^