Difference x

Difference x

--------------- = X * 100= % decrease.

Original price

However to make my results and investigation more accurate, I am to work out the percentage of how much the car decreases (depreciates) in value per year.

To work this out I will then divide the overall percentage depreciation by the age of the car.

Original price – second hand price = Difference

Difference x

Difference x

--------------- = X * 100= % decrease.

Original price ---------------

Age of the car

By using the equations above the answers given will tell me whether my hypothesis was correct. “The older the car the lower the cost of it when being sold second hand”

These calculations will be useful because it will show my statement to be correct, as the car increases the deprecation increase. By using those calculations, the results will be accurate and precise.

I will check that the statement makes sense by doing preliminary test before hand, to see whether what I wish to investigate is worth investigating. By this is mean, my result that I require my not be accurate, and the results that are given may not be strong enough evidence to prove my hypothesis to be correct.

I will also redo my results to make sure my calculations are correct, and if there are any static’s to be the same, I will then take the average.

I will present the information of my results and findings in a number of ways.

Pie charts or bar graphs: to see which is the most popular model of car

Line graphs

Scatter diagrams

These diagrams will be useful because they will represent my results clearly and accurately. By using these types of diagrams the results inputted would be very accurate and I will be able to see if my aim was correct, and I will also be able to tell if the results inputted into the diagrams relate or go with my statements. “The older the car, the greater the depreciation”

As a result of the calculations and diagram I will be able to compare, the depreciation of fords and Vauxhalls, overall and the deprecation of them per year.

With the result I can then make more accurate findings, to whether Vauxhall do depreciate faster than Fords.

## Investigation

After the data was given to me, I then selected the relevant information I was to need to carry out my investigation.

The following data is relevant to my investigation, and I going to be required to get results to see if my aim and hypothesis is correct.

With the data firstly I decided to see which the most popular model of each car was, out of the random selected data.

I decided to use a pie chart, as the information would be clear and accurate.

The results are as follows

Out of the randomly selected data, Escorts were the mot popular models of Vauxhalls, and Fiestas were the most popular to Fords.

So why is this that both cars are the most popular?

During my investigation I will see what factors effect the popularity if theses cars, and if the rate of the car deprecation has anything to do with them being the most popular models of cars.

The first question which occurred to me was, is there any correlation between the difference between the price when new and the age. I expected there to be a positive correlation if there was one, showing that as the age went up, the drop in price from when the car is new and when it is re-sold increases. Below is a table of the Price differences and the age.

If you look at graph #1, you will see that I was wrong. There was no correlation between the price difference and the age.

But by comparing both graphs, of the correlation of depreciation of Fords to the depreciation of Vauxhalls, there was a strong positive correlation of the Vauxhall’s. This tells use that as the older the age the larger the difference in price. So far my hypothesis is correct, but more accurate results will be need.

After seeing this, I thought that if I found what percentage of the original price the price difference is I could plot that in a scatter diagram to find the correlation between the depreciation percentage and the age. I found the depreciation with the equation

Original price – second hand price = Difference

Difference x

Difference x

--------------- = X * 100= % decrease.

Original price

Looking at graph #2, which shows the scatter diagram of the depreciation versus the age, you can definitely see a positive correlation where graph#1 did not. This is because the price difference is subject to the original price. If the original price is high, the price difference may be large in comparison to the others, but showing that price difference as a percentage of the original price, it puts all the results as a part of one constant rather than part of a number applicable only to itself. A line of best fit on graph #2 can allow us to estimate the depreciation of a car.

As the positive correction shown by both cars (on the graph), the line of best fit, which are drawn, can be used to see the data more clearly, and can be used to make more predicts.

By the two graphs it shows use that Fords depreciate faster than Vauxhalls. The graph tells me this, as the gradient is steeper.

As the values of the cars was extreme, I decided to take the mean of the price of the car when new, the average price it is to be sold second hand, by the age of the car.

Simply by adding the values together (of the price of the cars when new) and dividing it by the number of values.

I also did this to work out the old price, then with these to averages, I subtracted the new price from the old price to get the average in difference.

The table below now shows the averages of the price off a new car, a second hand car, and the percentage decrease per year and overall, making the age of the car subject at all times.

Vauxhalls.

Fords

Looking at the results in the table, I saw that with the 2-year-old cars, the deprecations were in the area of 20% - 30%. The 2-year-old cars were in the 25% - 40%. This showed me that the rate of depreciation might not be constant. To test this, I found the mean depreciation per year for all the cars by dividing the mean depreciation with the mean age, and got 11.65%. I then found the individual depreciation per year for all the cars. Below is a table of the results.

## Interpret and discuss results

Nadine Okyere June 2002 Mr Ashfall