The aim of our coursework is to investigate the effect of different variables on the price of a second hand car.

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Hugh Williams

Investigation

Aim:

The aim of our coursework is to investigate the effect of different variables on the price of a second hand car. I will try and achieve this aim by setting three hypotheses that I will try to prove or disprove depending on the results of the test data. In order to test the data I will be using sampling techniques to chose a sample that I will be working with throughout the investigation.

Hypotheses

  1. I predict that the depreciation of a used car depends on its age. This is because as a car increases in age it becomes less desirable and depreciates more in price. I expect there to be a positive correlation between age and percentage decrease in price.

  1. I predict that the price of a used Vauxhall is dependant on engine size. This is because as a car’s engine size increases, the car becomes more desirable and enters higher price brackets. The increase in engine size often leads to an increase in specifications as well which in turn leads to a slower depreciation rate. I expect there to be a negative correlation between engine size and percentage decrease in price.

  1. I predict that the price of a used car is dependant on mileage. This is because as the mileage of a car increases, the car becomes less desirable. Also as the mileage increases so does that age of the car. This increases depreciation and so I expect there to be a positive correlation between mileage and percentage decrease in price.

In order to prove or disprove the above hypotheses I will be using a stratified random sample as shown below. This sample was created by choosing a sample size of 25, as it is divisible by 100. The frequency of each model of car was then calculated and each total frequency was divided by 100 and multiplied by the sample number. All answers were then rounded up if .5 or above. For example the sample of fords was calculated like this: 16/100x25= 4. Once the sample sizes had been calculated a random sample was taken. I recorded the number of cars of each make. I took these numbers and used the “RAN” function on my calculator to produce the random samples. For example there were 16 fords in the data. I took the numbers 1 to 16 and entered 16Ran# into the calculator four times. I then took the four answers and converted these into the relevant data numbers to find the sample car. This produced the stratified random sample as shown below:

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In order to prove or disprove my first hypothesis “I predict that the depreciation of a used car depends on its age.” I will be using the stratified selective sample that I have outlined above. The advantage of using a stratified sample is that it minimises the amount of bias in the sample.

The graph shows the effect age has on the percentage decrease in price of a car. The results show that age has a large effect on the prices of second hand cars. With an increase in age the decrease in ...

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