Salvage Value Calculator

Formula

To calculate the Salvage Value (SV):

\[ SV = OP - \left(\frac{D}{100} \times OP \times A\right) \]

Where:

$SV$ is the salvage value ($)
$OP$ is the original price ($)
$D$ is the depreciation per year (%)
$A$ is the age of the asset (years)

What is Salvage Value?

A salvage value is defined as the theoretical price a person could acquire, or “salvage,” for a depreciated asset that they have. The salvage value is the theoretical price based on the original price and depreciation, but acquiring that value in a sale is much more difficult.

Example Calculation 1

Let's assume the following values:

Original Price ($OP$) = $10,000
Depreciation per Year ($D$) = 5%
Age of the Asset ($A$) = 3 years

Using the formula:

Step 1: Calculate the depreciation amount:

\[ \frac{D}{100} \times OP \times A = \frac{5}{100} \times 10000 \times 3 = 1500 \]

Step 2: Calculate the Salvage Value:

\[ SV = 10000 - 1500 = 8500 \]

The Salvage Value is $8500.

Example Calculation 2

Let's assume the following values:

Original Price ($OP$) = $15,000
Depreciation per Year ($D$) = 10%
Age of the Asset ($A$) = 5 years

Using the formula:

Step 1: Calculate the depreciation amount:

\[ \frac{D}{100} \times OP \times A = \frac{10}{100} \times 15000 \times 5 = 7500 \]

Step 2: Calculate the Salvage Value:

\[ SV = 15000 - 7500 = 7500 \]

The Salvage Value is $7500.