Calculating Depreciation with Percentages
When an item loses value over time, we call it depreciation. To calculate the amount lost, multiply the original value by the depreciation percentage as a decimal. For example, with a car worth £9,550 that depreciates by 30%, we convert 30% to 0.3 and multiply: 0.3 × £9,550 = £2,865 depreciation.
To find the new value after depreciation, you have two methods. You can subtract the depreciated amount from the original price: £9,550 - £2,865 = £6,685. Alternatively, recognize that after a 30% decrease, the car is worth 70% of its original value, so calculate: 0.7 × £9,550 = £6,685.
💡 Remember this shortcut: If something decreases by X%, its new value is 100−X% of the original. For a 30% decrease, multiply by 0.7 to find the new value directly.