Salvage Value - how to calculate it with Matlab

This program calculates the salvage value of an item at the end of a given year. It is necessary for you to provide the age of the item, its original price, and its depreciation rate. 

The value is obtained by the following formula: 

where:

S = salvage value
P = original price
i = nominal depreciation rate
Y = age in years
 

We show a video about how to use the formula. After the video, we show how to create a function to replicate the concept.

This is our simple Matlab code to calculate the above formula: 

function sv = salvg_value(p, i, y)
i = i/100;
sv = p*(1-i)^y;
 

We create another script to test and drive the above m-file: 

clc, clear, format compact, format bank 

p = input('Enter original price: ');
i = input('Enter nominal depreciation rate: ');
y = input('Enter number of years: '); 

sv = salvg_value(p, i, y)

 
Example 1:

What is the salvage value of Susan’s car if it is four years old, she bought it for $4933.76, and it depreciates 21% annualy? 

Now, let’s try our code...
 

Enter original price: 4933.76
Enter nominal depreciation rate: 21
Enter number of years: 4 

The result is: 

sv = 1921.70

Example 2:

Mary’s DVD player is 2 years old. What is its value if it cost $155 originally and depreciates at a rate of 22%?

We launch our code...
 

Enter original price: 155
Enter nominal depreciation rate: 22
Enter number of years: 2 

And the result is: 

sv = 94.30