Question

Obtain a straight line trend of sales by using the method of least squares from the following data. Predict the level of sales for 1992.
Years 1985 1986 1987 1988 1989 1990
Sales 40 42 50 46 54 58
(Rs.'000)

• A. 62.54
• B. 63.99
• C. 61.25
• D. 60.22

Answer 1

The correct option is B 63.99

Trend Equation $Y_t$ =a + bx
For calculating the values of a and b, we may use the following equations -
$\sum Y=na+b\sum X$
$\sum XY=a\sum x+b\sum x^2$
Substtuting the values given in the question you can get the trend values.