Actual Cash Value Calculator
Answers the Question
How much is my item worth?
Calculator for Actual Cash Value
What Is the Actual Cash Value?
Actual cash value is one approach to determining how much a used item is worth. Note that there are more complex methods of calculating depreciation
Why Is it Important?
- Selling a widely available commodity in new condition, setting a price is easy - we can just look at the going rate. Pricing a used item can be far more difficult, because there are fewer items that are in the exact same condition.
Formula(s) to Calculate Actual Cash Value
- ACTUAL CASH VALUE = PURCHASE PRICE * (EXPECTED LIFETIME OF ITEM - CURRENT AGE OF ITEM) / EXPECTED LIFETIME OF ITEM
- Assuming that items depreciate at a uniform rate. Many items command a large premium when they are new. Vehicles, for instance, are said to often lose a substantial portion of their value upon initial sale.
- Assuming that time is the only means by which a product can depreciate. Some products, for instance, depreciate by the number of uses.