1. 7-3 DEPRECIATION OBJECTIVES: 1) TO FIND ACCUMULATED DEPRECIATION OF A VEHICLE 2) TO CALCULATE AVERAGE ANNUAL DEPRECIATION OF A VEHICLE 3) TO DETERMINE RESALE VALUE Warm Up Find the average of the following numbers:23, 35, 48, 17, 92, 55

2. 7-3 DEPRECIATION OBJECTIVES: 1) TO FIND ACCUMULATED DEPRECIATION OF A VEHICLE 2) TO CALCULATE AVERAGE ANNUAL DEPRECIATION OF A VEHICLE 3) TO DETERMINE RESALE VALUE Homework Answers

3. 7-3 DEPRECIATION OBJECTIVES: 1) TO FIND ACCUMULATED DEPRECIATION OF A VEHICLE 2) TO CALCULATE AVERAGE ANNUAL DEPRECIATION OF A VEHICLE 3) TO DETERMINE RESALE VALUE Vocabulary Average Annual Depreciation – accumulated depreciation / age of the auto Accumulated Depreciation – the difference between an auto’s purchase price and its resale value Depreciation – a decrease in value over time Rate of Depreciation – the ratio of depreciation over a specific time interval to the value at the beginning of that time interval

4. 7-3 DEPRECIATION OBJECTIVES: 1) TO FIND ACCUMULATED DEPRECIATION OF A VEHICLE 2) TO CALCULATE AVERAGE ANNUAL DEPRECIATION OF A VEHICLE 3) TO DETERMINE RESALE VALUE Example 1 p 255 Average Annual Depreciation = (4915 + 2285 + 1835) / 3 = $3012 Average = sum / count

5. 7-3 DEPRECIATION OBJECTIVES: 1) TO FIND ACCUMULATED DEPRECIATION OF A VEHICLE 2) TO CALCULATE AVERAGE ANNUAL DEPRECIATION OF A VEHICLE 3) TO DETERMINE RESALE VALUE Example 2 p 256 Accumulated Depreciation = 4915 + 2285 + 1835 + 1530 = $10,565 To find the accumulated depreciation, we find the sum of each year’s depreciation for the period in question. If Accumulated Depreciation = Original Price – Resale Value, Then Resale Value = Original Price – Accumulated Depreciation Resale Value = 20,000 – 10,565 = $9,435 Average Annual Depreciation = 10,565 / 4 = $2,641

6. 7-3 DEPRECIATION OBJECTIVES: 1) TO FIND ACCUMULATED DEPRECIATION OF A VEHICLE 2) TO CALCULATE AVERAGE ANNUAL DEPRECIATION OF A VEHICLE 3) TO DETERMINE RESALE VALUE Homework p 256 – 257 #1-15