Enter the original cost of an asset or item, annual depreciation, and the life of the asset into the calculator to determine the residual value.

## Residual Value Formula

The following formula is used to calculate a residual value.

RV = C - (C*D*A)
• Where RV is the residual value ($) • C is the original cost of the item ($)
• D is the annual depreciation ($) • A is the age of the asset (years) To calculate the residual value, subtract the total depreciation from the original cost of the item. ## Residual Value Definition A residual value is defined as the total worth of an object or asset after a certain time period of use has passed. This is typically used when describing depreciating assets like cars or appliances. ## Example Problem How to calculate residual value? 1. First, determine the original cost of the asset. For this example, we will look at a car that was purchased for$50,000.00.

2. Next, determine the annual depreciation.

In this case, the car is not used often and kept in good condition, so the annual depreciation is only 6%.

3. Next, determine the age of the asset.

The car in this example problem has been owned for 5 years.

4. Finally, calculate the residual value.

Using the formula above, the residual value is calculated as:
RV = C – (C*D*A)
RV = $50,000 – ($50,000*(6/100)*5)
RV = \$35,000.00.