Car Value and Depreciation Analysis

Front

What is the impact of higher maintenance costs on the cost of ownership of a car?

Back

Higher maintenance costs increase cost of ownership.

Front

How do you calculate the annual depreciation of a car using straight-line depreciation?

Back

Annual Depreciation = (Initial Value - Salvage Value) / Useful Life. For example, if a car costs $37,800 and depreciates over 14 years, it depreciates $2,700 per year.

Front

What is the formula to calculate the value of a car after a certain number of years with a fixed percentage depreciation?

Back

Value = Initial Value * (1 - Depreciation Rate)^Number of Years. For example, a car worth $22,000 depreciating at 7% per year will be worth $17,000 after 5 years.

Front

How does the age of a car affect its depreciation rate?

Back

Newer cars depreciate faster than older cars.

Front

What type of graph best represents a car's depreciation over time?

Back

An exponential decay graph.

Front

Define depreciation in the context of car value.

Back

Depreciation is the reduction in the value of a car over time due to factors like age, wear and tear, and market demand.

Front

What is straight-line depreciation?

Back

Straight-line depreciation is a method where the same amount of value is deducted from the asset's value each year over its useful life.

Front

What factors can influence a car's depreciation rate?

Back

Factors include age, mileage, condition, brand reputation, and market demand.

Front

What is the salvage value of a car?

Back

The salvage value is the estimated residual value of a car at the end of its useful life.

Front

How does mileage affect a car's depreciation?

Back

Higher mileage typically leads to faster depreciation as it indicates more wear and tear.