Home
Back
Resale Value Formula:
| From: | To: |
Resale value calculation estimates the future worth of an asset based on its original price and expected depreciation rate over time. This is commonly used for vehicles, equipment, and other depreciating assets to determine their market value after a certain period.
The calculator uses the resale value formula:
Where:
Explanation: The formula calculates compound depreciation over time, where the asset loses value each year based on the specified depreciation rate.
Details: Accurate resale value estimation is crucial for financial planning, insurance purposes, investment decisions, and determining when to sell or replace assets. It helps individuals and businesses make informed decisions about asset management and budgeting.
Tips: Enter the original purchase price in USD, the annual depreciation rate as a decimal (e.g., 0.20 for 20% depreciation), and the number of years. All values must be valid (price > 0, depreciation rate between 0-1, years ≥ 0).
Q1: What is a typical depreciation rate for vehicles?
A: New cars typically depreciate 15-20% per year, with higher rates in the first year and slower depreciation in subsequent years.
Q2: How does depreciation rate vary by asset type?
A: Different assets depreciate at different rates. Vehicles depreciate faster than real estate, while electronics may have very high depreciation rates.
Q3: Can depreciation rate be zero or negative?
A: Depreciation rate should be between 0 and 1. Some assets like collectibles or real estate in appreciating markets may have negative depreciation (appreciation).
Q4: What factors affect actual resale value?
A: Condition, maintenance history, market demand, brand reputation, mileage (for vehicles), and economic conditions all influence actual resale value.
Q5: Is this calculation accurate for all assets?
A: This provides an estimate based on straight-line depreciation. Actual market conditions may vary, and some assets may follow different depreciation patterns.