Tax Depreciation Schedules Australia for House Depreciation.
Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15%...
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Transcript of Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15%...
![Page 1: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/1.jpg)
6.5 CONSTRUCT & APPLY EXPONENTIAL MODELS
![Page 2: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/2.jpg)
THINGS ARE NOT ALWAYS WHAT THEY SEEM…
![Page 3: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/3.jpg)
THINGS ARE NOT ALWAYS WHAT THEY SEEM…
![Page 4: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/4.jpg)
CONSTRUCT & APPLY MODELS
Vehicle 1 Price: $25, 000
Depreciation: $3000 per year
Vehicle 2 Price: $25, 000
Depreciation: 15% per year
So you want to buy a car?
![Page 5: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/5.jpg)
APPLYING EXPONENTIAL MODELS Every year, Vehicle 1 depreciates $3000 Every year, Vehicle 2 depreciates 15%
Years (n) Vehicle 1 Vehicle 2
0 $25 000 $25 000
1 $22 000 $21 250
2 $19 000 $18 062.50
3 $16 000 $15 353.13
VEHICLE 1: v = 25 000 – 3000n
VEHICLE 2: v = 25 000
Which vehicle is a better deal when it comes to depreciation?
![Page 6: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/6.jpg)
APPLYING EXPONENTIAL MODELS
0 1 2 3 4 5 6 7 8 90
5000
10000
15000
20000
25000
30000
Vehicle Depreciations
Vehicle 1Vehicle 2
Time (years)
Valu
e o
f V
ehic
le
Vehicle 2 depreciates less in the long run! Stunning result…
![Page 7: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/7.jpg)
SIMPLE & COMPOUND INTEREST Edgar has $500 to invest and is
considering two investment options.Option A: A treasury bond that pays 8% simple interest. The amount, A, after n years is given by the equation A = 500 + 40n.Option B: A savings account that pays 6.5% per year, compounded annually. The amount, A, after n years is given by the equation A = 500(1.065)n.
Which is a better investment? Why?
![Page 8: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/8.jpg)
SIMPLE & COMPOUND INTEREST Option A: A = 500 + 40n Option B: A = 500(1.065)n
0 2 4 6 8 10 12 140
200
400
600
800
1000
1200
Investment Options
Option AOption B
Time (years)
Investm
ent
Am
ount
($)
![Page 9: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/9.jpg)
SIMPLE & COMPOUND INTEREST
Option A ahead at the start Option B catches up and surpasses A Also, notice that Option A is linear, but
Option B is exponential.
0 2 4 6 8 10 12 140
200
400
600
800
1000
1200
Investment Options
Option AOption B
Time (years)
Investm
ent
Am
ount
($)
![Page 10: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/10.jpg)
LINEAR, QUADRATIC, EXPONENTIAL, OR NONE?
LINEAR
![Page 11: Vehicle 1 Price: $25, 000 Depreciation: $3000 per year Vehicle 2 Price: $25, 000 Depreciation: 15% per year So you want to buy a car?](https://reader030.fdocuments.us/reader030/viewer/2022032709/56649eb15503460f94bb715c/html5/thumbnails/11.jpg)
LINEAR, QUADRATIC, EXPONENTIAL, OR NONE?
EXPONENTIAL