Maths Quest Maths A Year 12 for Queensland Chapter 2 Appreciation and depreciation WorkSHEET 2.

1 1

WorkSHEET 2.1 Appreciation and depreciation

Name:
/50
1 If the inflation rate is 3% p.a., estimate the cost Price next year = 103% of $28 000 3
next year of a new car which has a price tag of = $28 840
$28 000 this year.

2 If inflation continues to grow at 3% p.a. for the

next 5 years, what would be the price of the car
from question 1 in 5 years’ time.
P  $28 000 5
R  3% p.a.
n1
T 5

AP 1 n T
 R 
 100  n 

 28 000 1  15
 3 
 100 1 

 28 000 1  3 5
 
 100 
 $32 459.67

3 A valuable coin, purchased for $250, is P  $250 5

expected to grow in value by 10% p.a. Give an R  10% p.a.
estimate of the value of the coin in 10 years’ n1
time, correct to the nearest $10.
T  10
 R nT
A  P1  
 100  n
 1  10
 10 
 2501 
 100 1
 10 10
 
 2501 100 


 $650 to the nearest $10

4 A block of land was available for sale last year (a) Price last year  $35 000 5
at $35 000. Price this year 103.2% of $35 000
(a) If the inflation rate during the year was
3.2%, what would be the value of the  $36120
land this year?
(b) Price this year  $36120
Maths Quest Maths A Year 12 for Queensland Chapter 2 Appreciation and depreciation WorkSHEET 2.1 2
(b) If the inflation rate this year is reduced to
Price next year 102.7% of $36120
2.7%, what price would the land attract
next year?  $37 095

5 A new car worth $50 000 depreciates by $6000 (a) 8

per year.
(a) Complete the table below to show the Age 0
1 2 3 4 5
(years) (new)
change in the value of the car over a
Value ($) 50 000 44 000 38 000 32 000 26 000 20 000
5-year period.

0 (b)
Age (years) 1 2 3 4 5
(new)
Value ($) 50 000

(b) Graph the age of the car (on the x-axis)

against the value of the car (on the
y-axis).
(c) Use your graph to determine the age of
the car when it could be ‘written off’
(i.e. have no value).

(c) Extending the line to determine the age of the

car when it is $0 in value gives an estimated
age of 8 31 years.

6 The depreciation on a $3500 computer package 7

is shown in the table below.

Age 0
1 2 3 4 5
(years) (new)
Value ($) 35 000 2975 2530 2150 1830 1550

Draw a graph of age (on the x-axis) against the

value (on the y-axis). Draw a smooth curve
through the points. Extend this curve and
estimate the value of the computer when it is
8 years old.
From the curve, the computer has a value of
approximately $950 when it is 8 years old.

7 A $200 000 bus coach depreciates at the rate of S  V0  Dn 5

$15 000 per year. Calculate the salvage value  200000 15000 5
of the coach after 5 years.
 200000  75000
 $125000
So, the coach has a salvage value of $125 000
after 5 years.
Maths Quest Maths A Year 12 for Queensland Chapter 2 Appreciation and depreciation WorkSHEET 2.1 3
8 After how many years would the coach in New value  $200 000 4
question 7 have a salvage value one-quarter of
1
its original value? of $200000  $50 000
4
S  V0  Dn
50 000  200000  15 000  n
15 000 n  $150000
150000
n  15 000
 10
So, the coach would be worth one-quarter of its
original value after 10 years.

9 The price of a new car is $25 000. Its value Depreciati on  $250 per month 4
depreciates by $250 each month.  $250 12 per year
Calculate the salvage value of the car after
5 years.  $3000 per year
S  V0  Dn
 25 000  3000  5
 $25 000  $15 000
 $10 000
So, the salvage value of the car after 5 years is
$10 000.

10 The car in question 9 is driven until its salvage S  V0  Dn 4

value is $0. What would be its age at this stage? 0  25000  3000  n
3000 n  25000
25000
n  3000
n  8 31 years
So, when the car is 8 31 years old, its salvage
value will be $0.