APRIL IN DEPTH

When something you own loses value, that's called depreciation. Almost always, cars depreciate as time goes on. It's a fact of life. The second you drive a car off the lot, it drops at least 10% in value. There's another tidbit about depreciation: it's usually expressed as a percent. To find percent of depreciation, use the following formula:



Example: You bought a new vacuum for $100 10 years ago and sold it yesterday at your garage sale for $10. How much did it depreciate?
Compute: (Original Value - Current Value) / Original Value x 100%
($100 - $10) / $100 x 100%
$90 / $100 x 100%= 90% Depreciation



1. You can buy a car for $12,564 in 1990 and sell it in 1995 for $4500. How much did it depreciate in 5 years?






2. The PC with a 286 microprocessor your parents bought back in the 80's for $1500 is now worth $50. How much did that depreciate?






3. Brenda and Joe are young entrepreneurs. Over the years their parents bought them $500 worth of Girlie Dolls and Army Guys. Last week they sold the lot at their garage sale for $25. So while Brenda and Joe saw pure profit, their parents saw how much depreciation?






4. Your uncle's rusted pick-up originally sold for $15,997 in 1989. Consider the following chart and calculate 1) the overall depreciation and 2) the depreciation from each year to the next.

YearValue
'90
'91
'92
'93 		$11,774
$10,435
$9,878
$7,392


5. Please list the steps you used to do part 2 of question #4: