FLASHCARD 4-1 to 4-6

Front

What is property damage liability insurance?

Back

Property damage liability insurance is a type of insurance that covers the cost of damage you cause to someone else's property in an accident.

Front

If you have $9,854 in property damage liability insurance and cause $10,323 in damage, how much do you pay out of pocket?

Back

You pay $469 out of pocket.

Front

How do you calculate the depreciation of a car?

Back

Depreciation can be calculated by taking the initial value of the car, subtracting its current value, and dividing by the number of years owned.

Front

What is the formula to find the value of a depreciating asset after a certain time?

Back

Value = Initial Value - (Depreciation Rate * Number of Years).

Front

If a car purchased for $28,400 depreciates to zero in 8 years, what is the annual depreciation?

Back

Annual depreciation = Initial Value / Lifespan = $28,400 / 8 = $3,550.

Front

How do you find the value of a car after a certain number of months?

Back

Calculate the total depreciation over the months and subtract it from the initial value.

Front

What is the average depreciation rate of a car?

Back

The average depreciation rate is typically around 15-20% per year for the first few years.

Front

What is the significance of a car's resale value?

Back

Resale value indicates how much a car is worth after depreciation and affects the total cost of ownership.

Front

How far can a car travel on a full tank of gas?

Back

Distance = Miles per Gallon * Gallons in Tank.

Front

If a hybrid car averages 44 miles per gallon and has a 12-gallon tank, how far can it travel?

Back

It can travel about 528 miles.