Question

The correlation coefficient rbetween an employee's age, x, and yearly salary, y, is0.547.What percent of the variation in yearly salaries can be explained by differences inthe employees' ages?(Make answer a percent then rounded to the tenths place

Answer 1

When given the correlation coefficient of two variables, you can find out how much of the variation in the dependent variable can be explained by the independent variable by the formula:

`(correlationcoefficient)^2*100`

Where correlation coefficient is 0.547, so

`(0.547)^2*100=29.9`

Answer: 29.9% of the variation in salary can be explained by age