ma132.4 - Math 132.4 Lesson 4 Property Appraisal and Linear...

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Math 132.4Lesson 4:Property Appraisal andLinear Estimation4.1Application.In this lesson we consider the appraisal of a home based on five criteria: age, number of bathrooms, number of bed rooms, heated square feet and general condition. Several homes in a similarlocation have been sold recently and numerical values for all five criteria and sales prices are known. Ahome which is not yet sold will have given numerical values for the five criteria. Based on the past saleswe want to estimate the value of the home which is for sale.4.2Math Model.Generally, if any of the criteria is larger, then the value of the home should increase. Forappraisals with "comparable" homes, one can expect the value of the for sale home to be related in a linearway to the other homes:Value = b + m1*x1 + m2*x2 + m3*x3 + m4*x4 + m5*x5 whereb, m1,…, m5 are to be found andx1 = agex2 = bath roomsx3 = bed roomsx4 = area andx5 = condition.We will use LINEST to find b, m1,…, m5 from the known data for the sold homes.4.3Method of Solution.
24.3.1Table Method.The following data has been collected about the recent sales of similar homes. One could attemptto "interpolate" between the homes with similar criteria (x1,…, x5) numbers and those of the for salehome. Since there are five criteria, this can become some what subjective!

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