Appliance Depreciation Calculator

Formula

The formula to calculate the current cash value of an appliance is:

\[ CV = RCV - (DR \cdot RCV \cdot AGE) \]

Where:

$CV$ is the current cash value (\$)
$RCV$ is the replacement cash value (\$)
$DR$ is the depreciation rate (%)
$AGE$ is the age of the appliance in years

What is Appliance Depreciation?

Appliance depreciation is the loss of value of any appliance due to wear and tear and replacement costs. This depreciation is calculated to determine the current value of the appliance, which is essential for insurance claims, resale value assessments, and financial planning.

Example Calculation 1

Let's assume the following values:

Replacement Cash Value (RCV) = $1000
Depreciation Rate (DR) = 5%
Age of Appliance (AGE) = 3 years

Using the formula:

\[ CV = 1000 - (0.05 \cdot 1000 \cdot 3) = 1000 - 150 = 850 \, \$ \]

The Current Cash Value is $850.

Example Calculation 2

Let's assume the following values:

Replacement Cash Value (RCV) = $500
Depreciation Rate (DR) = 10%
Age of Appliance (AGE) = 5 years

Using the formula:

\[ CV = 500 - (0.10 \cdot 500 \cdot 5) = 500 - 250 = 250 \, \$ \]

The Current Cash Value is $250.