Financial Appreciation and Depreciation

Name:

Date:

📊 Part 1: Understanding Appreciation and Depreciation

1. Which of the following best describes appreciation?

When an asset loses value over time

When an asset increases in value over time

When an asset stays the same value

When an asset is sold

2. A house was bought for $400,000 and is now worth $450,000. What is the percentage appreciation?

10%

12.5%

15%

20%

3. Which of these assets typically depreciate in value? (Select all that apply)

Cars

Mobile phones

Real estate property

Computers

4. Show your working for question 2 in the space below:

💰 Part 2: Calculating Percentage Changes

5. A car was purchased for $35,000. After two years, it is worth $28,000. Calculate the percentage depreciation.

Formula: Percentage Change = (New Value - Original Value) ÷ Original Value × 100%

Answer: __________ % depreciation

6. An investment property increased in value from $250,000 to $275,000. Calculate the percentage appreciation.

Answer: __________ % appreciation

7. A laptop was bought for $1,800 and sold for $1,260. What is the percentage loss?

Answer: __________ % depreciation

8. Complete the sentence: If a percentage change calculation gives you a __________ result, it means the asset has appreciated. If it gives you a __________ result, it means the asset has depreciated.

🏠 Part 3: Real-World Applications

9. Sarah bought a house in Perth for $480,000 in 2020. In 2024, the house is valued at $528,000. Calculate the percentage appreciation and explain why understanding this is important for homeowners.

10. A motorbike depreciates by 15% each year. If it was originally worth $8,000, what will it be worth after one year?

Value after one year: $__________

11. Explain in your own words why it's important to understand appreciation and depreciation when making financial decisions.