**Car Depreciation Project**

**1993 Dodge Caravan**

**by Rebekah Kahle**

Price of the vehicle after this many years

After 7 Years

$3572.79

After 6 Years

y = 5308.22 (.945)^6

$4001.65

After 5 Years

y = 5308.22(945)^5

$4000.44

Financial Options for the Toyota 4runner

Sticker Price

The sticker price for this vehicle is $22,580

The Car Depreciates at a Rate of 6% per year

The Formula

The formula to find out how much a car is worth after a couple of years is

y=a(1-r)^t where

a = the initial amount

r = rate

t = time

Exponential Model

f(x) = 9680.59(.921)^x

Prices of the Dodge after Certian amounts of Years

After 7 Years

Equation: y = 9680.59 (.921)^7

Worth: $5441.51

After 6 Years

y = 9680.59 (.921)^6

$586.27

After 5 Years

y = 9680.59(.921)^5

$6415.05

Sticker Price

The sticker price for this vehicle is $17,555

Depreciation Rate

It has a depreciation rate of 8% per year.

Formula

The formula to find out how much a car is worth after a couple of years is

y=a(1-r)^t where

a = the initial amount

r = rate

t = time

Exponential Model

f(x) = 5308.22(0.945)^x

Financing Options for the Dodge

**1993 Toyota 4runner**

Summary of Findings

1. Is the value of the car the same, more or less then what you end up paying for it?

The value of the car ends up being less than what you pay for it.

2. How does this make you feel?

It makes me feel disappointed that the value isn't more than what you pay for it.

3. How will you use this information in the future when you start purchasing your own car in real life?

I will do this same process when I am looking into purchasing my own car in real life and take more aspects of buying a car into consideration.

y = 5308.22(.945)^7

Data Table

(x) Years Since 2013 (y) Price of Car One

0 (2013).........................................$22,580

16 (2012)........................................$21,912

17 (2011).........................................$21,076

18 (2010).......................................$20,474

19 (2009)......................................$18,812

20 (2008)....................................$17,597

Data Table

(x) Years Since 2013 (y) Price of Car Two

0 (2013...............................................................$17, 562

16 (2012)..............................................................$16,802

17 (2011)................................................................$16,050

18 (2010)...............................................................$15,000

19 (2009)................................................................$14,809

20 (2008)................................................................$14,080

6 Years at 7% Compounded Semiannually

A(t) = $22,580 (1 + .07/2) ^ 2*6

Total Cost of Loan: $34119

Monthly Payments: $2843

A (t) = $22,580 (1+ .0625/4)^4*5

Total cost of loan: $30,788.72

Monthly Payments: $1129

7 Years at 7.25% Compounded Monthly

Equation: A(t) = 22,580 (1+.0725/12)^12*7

Total cost of loan: $32,547

Monthly Payments: $268.81

5 Years at 6.25% Compounded Quarterly

6 Years at 7% Compounded Semiannually

A (t) = $17,561 (1+ .07/2)^2*6

Total cost of loan: $26535.88

Monthy Payments: $2211.32

5 Years at 6.25% Compounded Quarterly

7 Years at 7.25% Compounded Monthly

A(t) = $17,561 (1 + .0725/12) ^12*7

Total Cost of the Loan: $29126

Monthly Payments: $346.74

A (t) = $17,561 (1 + .0625/4) 4*5

Total Cost of the Loan: $59037

Monthly Payments: $2951.88