Enter the original price, depreciation % per year, and the number of years into the calculator to determine the salvage value.

## Salvage Value Formula

The following formula is used to calculate a salvage value:

SV = OP – (D/100*OP * A)

• Where SV is the salvage value (\$)
• OP is the original price (\$)
• D is the depreciation per year (%)
• A is the age of the asset (years)

## Salvage Value Definition

A salvage value is defined as the theoretical price a person could acquire, or “salvage”, for a depreciation asset that they have.

The salvage value is the theoretical price based on the original price and depreciation, but acquiring that value in a sale is much more difficult.

## How to calculate salvage value?

Example Problem #1:

In this first example, someone has a dishwasher that they’ve owned for 5 years. Over those 5 years, the dishwasher depreciated an average of 11.5% per year. The dishwasher was originally purchased for \$1000.00.

Using the formula above, we can calculate the potential salvage value of the dishwasher.

SV = OP – (D/100*OP*A)

= 1000 – (11.5/100*1000 * 5)

= \$425.00.

Example Problem #2:

In this next example, a person has a heater they are looking to sell for close to its salvage value. The heater was originally purchased at \$2,000.00, it’s been in use for 4 years, and has depreciated an average of 10% per year.

Using the formula as we did in example 2:

SV = OP – (D/100*OP*A)

= 2000-(10/100*2000*4)

=\$1200.00.