Actual Cash Value Calculator

Feb 23, 2019 0 Comments

Actual Cash Value Calculator is used to calculate the Actual Cash Value (ACV) of an insured property

Actual Cash Value:
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Background Information

What does Actual Cash Value mean?

ACV is a measure of the current value of a depreciating asset. It takes into consideration the original cost of the item, it's age and life expectancy.

Actual Cash Value is used by an insurance company to find the current valuation of an insured property such as a car or home. They use it to determine how much money needs to be paid for a damaged property.

How to calculate ACV?

ACV is calculated by subtracting the depreciation from the replacement or original cost of the item. The depreciation is usually calculated by estimating a useful or expected life of the item and calculating what percentage of that life remains.

Actual Cash Value Formula

The ACV formula is given below:-

ACV = `r * (e - c) / e`

Where:-

  • r = purchase price of item
  • c = current age of item years
  • e = expected life of item years
Example

Actual Car Value Calculator

Suppose you bought the 718 Boxster S for $71,400 two years ago. Assuming, the life expectancy of the car is 8 years

To know how much your car is worth right now, you can calculate it's Actual Cash Value as follows:-

  • `r * (e - c) / e`
  • `71400 * (8 - 2) / 8`
  • `71400 * 6 / 8`
  • `428400 / 8`
  • ACV = `53,550`
 
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History
Feb 23, 2019
Calculation formula breakdown
May 20, 2018
Tool Launched