2.156 Salaries and raises. For this exercise, we consider a hypothetical employee who starts working in Year 1 with a salary of $50,000. Each year her salary increases by approximately 5%. By Year 20, she is earning $126,000. The following table gives her salary for each year (in thousands of dollars):

Year Salary Year Salary Year Salary Year Salary
1 50 6 63 11 81 16 104
2 53 7 67 12 85 17 109
3 56 8 70 13 90 18 114
4 58 9 74 14 93 19 120
5 61 10 78 15 99 20 126
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Figure 2.34 Plot of salary versus year for an individual who receives approximately a 5% raise each year for 20 years, with the least-squares regression line, Exercise 2.156.

  1. (a) Figure 2.34 is a scatterplot of salary versus year, with the least-squares regression line. Describe the relationship between salary and year for this person.

  2. (b) The value of r2 for these data is 0.9832. What percent of the variation in salary is explained by year? Would you say that this is an indication of a strong linear relationship? Explain your answer.