How to Use the Depreciation Calculator

A Depreciation Calculator is a tool that helps estimate the reduction in value of an asset over time. This is especially useful for businesses, accountants, or individuals managing fixed assets like vehicles, equipment, or computers.

What Is Straight-Line Depreciation?

Straight-line depreciation spreads the depreciation amount evenly over the asset's useful life. The formula is:

(Initial Cost - Salvage Value) ÷ Useful Life = Annual Depreciation

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Step-by-Step Guide to Use

1. Enter Initial Asset Cost
   • This is how much the asset cost when purchased.
   • Example: $10,000
2. Enter Salvage Value
   • The expected value of the asset at the end of its useful life.
   • Example: $1,000
3. Enter Useful Life (years)
   • How long the asset is expected to be used.
   • Example: 5 years
4. Click “Calculate Depreciation.”
   • Instantly, the calculator will show:
     • Total amount to be depreciated
     • Annual depreciation cost

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Example

If:

• Initial Cost = $10,000
• Salvage Value = $1,000
• Useful Life = 5 years

Result:

• Depreciable Amount: $9,000
• Annual Depreciation: $1,800

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FAQ – Depreciation Calculator

Q1: What is depreciation?
A: Depreciation is the reduction in value of an asset over time due to wear, usage, or obsolescence.

Q2: What is salvage value?
A: It’s the estimated residual value of an asset at the end of its useful life.

Q3: Can this calculator be used for vehicles?
A: Yes, it’s perfect for cars, machinery, electronics—any depreciable asset.

Q4: Is this method accepted for accounting?
A: Yes, straight-line depreciation is widely accepted and used in financial statements.

Q5: Does this calculator support accelerated depreciation?
A: No, this version only supports straight-line depreciation. Let me know if you want versions for declining balance or MACRS (U.S. tax method).