Assignment 12

by

Johnie Forsythe

Exploring Postage Stamp data using Microsoft Excel:

Introduction:

In the United States, the price of a first class postage stamp for US Mail has increased since the beginning of the twentieth century. This investigation will use Mircrosoft Excel to make predictions about the cost of a stamp in the future.

Investigation: This data set is based on the first class letter postage for the US Mail from 1933 to 1996. Plot the data and develop a prediction function. Answer the following questions:

- When will the cost of a first class postage stamp reach $1.00?

- When will the cost be 64 cents?

- How soon should we expect the next 3 cent increase?

We can create a table of values for the data and plot the values on a scatter plot.

 Year
  Price (in cents)
 1919 2
1932 3
1958 4
1963 5
1968 6
1971 8
1974 10
1975 13
1978 15
1981 20
1985 22
1988 25
1991 29
1994 32
1997 33
1999 34
 2002 37

To begin my exploration, I used linear, polynomial, and exponential models to develop various prediction functions. By observing and analyzing this information, I can choose the most accurate model to make make my predictions.

Clearly, the postage stage growth is not linear. We can visually see this on the chart, and the R-squared constant is quite low.

Polynomial Model

The R-squared constant is high!! However, from approximately 1928 to 1950, the polynomial trend line decreases. We know that the trend in stamp price never decreases, therefore this would not be the best model to use.

Exponential Model

The R-squared constant is high, however not quite as high as the Polynomial R-squared value. The exponential trend line increases exponentially, just like the price of stamps . It seems that this model would be an appropiate model to use.

CONTINUE ----->