1. Warmup
Julio has $10,000 worth of property damage liability insurance. He caused an accident that caused $12,000 in damages to a house. How much of the damage must Julio pay?
Barb was in an auto accident which was her fault. She has 50/150 bodily injury insurance. Her passenger was seriously injured and had medical bills of $110,000. The other driver had minor injuries and his medical bills were $2,200. How much will not be covered by insurance?

2. 5-5 AUTOMOBILE DEPRECIATION
Banking
11/11/2018
5-5 AUTOMOBILE DEPRECIATION
OBJECTIVES
Write, interpret, and graph a straight line depreciation equation.
Interpret the graph of a straight line depreciation.
Write and interpret an exponential depreciation equation.
Chapter 1

3. What is slope?

4. When graphing linear depreciation, the x-axis is years and the y-axis is value. Intercepts occur when the vehicle is new and when the vehicle is worth nothing
Example 1
Suppose that you purchase a car for $27,000. According to your online research, this make and model of car loses all of its marketable value after 12 years. That is, it depreciates to a value of zero dollars 12 years after the purchase date. If this car depreciates in a straight line form, what are the intercepts of the depreciation equation?
What are the intercepts if a $19,000 car loses its value in 9 years?
Example 2

5. Example 3
Determine the slope of the straight line depreciation equation for the situation in Example 1.
Determine the slope of the straight line depreciation equation for the situation in Example 2.
Example 4

6. EXAMPLE 5
Write the straight line depreciation equation for the situation discussed in Examples 1. Then draw the graph of the equation.

7. EXAMPLE 6
Write the straight line depreciation equation for the situation discussed in Examples 2. Then draw the graph of the equation.

8. EXAMPLE 7
Suppose that Jack purchased a car five years ago at a price of $27,600. According to research on this make and model, similar cars have straight line depreciated to zero value after 12 years. How much will this car be worth after 4 years?
A car sells for $18,495 dollars and straight line depreciates to zero after 9 years. Write the straight line depreciation equation for this car. What will the car be worth after 7 years.?
EXAMPLE 8

9. Does depreciation really follow a straight line?

10. Example 10
After entering the data values, the calculator gave the values: y=a*b^x, a = 32560, b = .875
a) Write the exponential equation
b) What was the value of the vehicle when it was new?
c) What is the depreciation percentage?
d) What is the value after 7 years?

11. Example 11