A large national bank charges local companies for using their services. A bank official reported the results of a regression to predict the bank charges (Y) -- measured in dollars per month-- for services rendered to local companies. One independent variable used to predict service charges is the company's sales revenue (X) -- measured in millions of dollars. Data for 21 companies who use the bank's services were used to fit the simple linear regression model and the results are provided below:

Y-hat = -2,700 + 20X

Interpret the estimate of β1, the slope




All companies will be charged at least 2,700


For every $1 million increase in company revenue, we expect the bank charge to increase by $20


For every 1 million increase in company revenue, the bank charge decreases by $2,700


For every $1 million in sales revenue, we expect the service charge to decrease by $20