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.

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## 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)

## 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?

**First, determine the original cost of the asset.**For this example, we will look at a car that was purchased for $50,000.00.

**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%.

**Next, determine the age of the asset.**The car in this example problem has been owned for 5 years.

**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.