MVRUS - Motoring Mathematics

Buying a Car

Two similar cars (two years old) are shown in a sellers' guide as having the following prices

Car	New price	Service	Miles	Selling Price
A	£10,000	Yes	30,000	£7,500
B	£10,000	No	30,000	£5,700

A regular service interval is 5000 miles and costs £200 a service.

Who came out the winner, the owner who did regular services or the one who did not?

Selling price A - Selling price B (£7,500 - £5,700 = £1,800 )

i.e. Car A sold for more than car B

Service costs car A 30,000 ÷ 5,000 = 6 services @ £200 = £1,200

Difference £1,800 - £1,200 = £600

So, even with a regular service history and its associated costs the

owner of car A still makes £600 more than that of car B.

Depreciation

Once a car is taken onto the road its value begins to decline. The depreciation is the difference between the original purchase price and the final selling price. Find the annual depreciation for a car purchased at £5500 and sold three years later for £2800.

Depreciation = (Original price - Selling price)÷ Time of ownership = (5500 - 2800)÷ 3 = 2700 ÷ 3 = £900

Answer: The annual depreciation is £900 per year This means that for each year that the car was owned it cost £900. £900 ÷ 52 = £17 A week or £17 ÷ 7 = £2.40 a day