I have been asked to investigate factors that affect the depreciation

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I have been asked to investigate factors that affect the depreciation

of cars.

I have been asked to investigate factors that affect the depreciation

of cars. To do this I would ideally like to collect my own data about

used cars. This would be called primary data. I would have collected

data on the make, model, mileage, engine size, age, price and price

when new of several hundred used cars. Unfortunately this would have

taken a lot of time, but the advantage would have been that it would

have been reliable data which I could trust, and I could have found

out exactly the information that I wanted.

It would have been impossible for me to do such a large survey,

however, so I had to use secondary data that I got from the CCEA

website. The advantage of this was that it was quick, cheap and easy,

but I can't be sure of the accuracy of these results and I don't know

if any bias was involved when it was being collected. I have also

found that many of the results are incomplete.

From the very start, I am sure that two of these results are wrong - a

Renault Laguna which costs £50,000, and a Renault Clio that increases

in value. I have deleted these results straight away.

Hypothesis 1

My first hypothesis is that cars depreciate more as they get older. I

used the spreadsheet on the computer to test this hypothesis, but

first I had to get the age and percentage depreciation for each car,

neither of which are recorded in the table.

Firstly, to get the age of the cars, I subtracted the year in which

they were made from 2002, the year when the data was collected. I

first created a new column on the spreadsheet and called it age. Then

I typed into the first box under the title the formula for age-

=2002-F2

where F2 is the column for the year the car was made. This filled the

box with the age of the car. I then highlighted the box, right clicked

and selected copy, before highlighting all the boxes below and

selecting paste special, formula. This filled in the ages for all of

the cars.

Next, to get the percentage depreciation, I made another column and

filled it with a more complicated formula-

=(I2-H2)/I2*100

where I2 is the price when new and H2 is the price now. This filled

the first box in the percentage depreciation column with the

appropriate value, and I copied the formula into the other boxes as

before.

I then highlighted these two columns and copied them into chart 2.

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