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*(1i)^y;
We create another script
to test and drive the above mfile:
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
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