Estimated regression equation?????

I might start with the hint that they give you. I don't know if I would use the =IF() function like they suggest, but the first step is to convert the "text" categories into something numerical. The basic idea behind the hint is to assign numbers to the categories so they make sense in an equation.

I was also thrown off by the "IF" function, but is there a way to incorporate it?

In what way were you "thrown off" by the IF function? I'm sure there are many different ways to use the IF function in a problem like this. The hint gives a decent explanation of basically how the IF function works. What specifically about using the IF function in this context are you having trouble with?

But how do I get it to go in the alloted sections? drag from B2:B112 for Compact in cell F2

If I understand correctly, then, yes. The idea is to create the formula in F2, then copy/paste or drag/fill down column F.

The proposed IF() functions you have are good when you have only two choices ("midsize" or "not midsize"). In this case, you have three possible choices (compact, midsize, large) [which is one reason I would use a lookup function rather than an IF() function]. In order to use the IF() function on this part of the problem, you are going to have to nest IFs within IFs =IF(B2="text1",value_if_true,IF(B2="text2",value_if_true,IF(B2="text3" and so on)

One other observation, It looks like you may be trying to assign "compact" a value between "midsize" and "large," when, in reality, "midsize" cars are between compact and large in size. As you are deciding what values to assign to each class, be sure the values you choose will have some basis in reality so that, if there is a relationship between class and gas mileage, you can see it.

Help file for the LINEST() function http://office.microsoft.com/en-us/ma...823.aspx?CTT=1 in case it might help understand what they are asking us to do.

I say this because if I have assigned a value to the "class" of vehicle, am I only using compact and regular fuel type, how does this connect with the Input Y range and Input X range?

I'm not certain I understand this question. The problem is asking us to use 3 different independent variables to come up with a regression/estimating equation for fuel economy. So, our known_x argument is going to need to be a 3 column matrix, with one column for each of our independent variables. Known_y's will be a single column vector with the known fuel economy numbers in it.

That's essentially correct. I don't think LINEST() will accept a non-contiguous, "two part" range for the known_x argument, so you may need to either rearrange the data so that known_x can be C2:C312,D2:D312,E2:E312 (entered as C2:E312 for known_x in the LINEST function) or you will need to add a column with =C2 (copied down) in G2:G312 so you can use E2:G312 as the known_x argument.