Depreciation Calculator

Depreciation is how much value something loses as it ages. A car, a phone, or a piece of office equipment is worth less each year than the year before, and depreciation puts a number on that drop. This tool spreads the loss across the years three different ways and shows a year-by-year schedule of the value left.

The numbers are plain (no currency assumed), so the same calculator works whatever you spend in.

How to Use It

1. Pick a common item to load typical settings, or leave it on Custom. The presets are rough, everyday estimates - change anything that does not fit your case.
2. Choose a method: straight line, declining balance, or double declining balance.
3. Enter the initial value (what it cost), the salvage value (what it is worth at the end), and the useful life in years. For declining balance, set the rate per year.
4. Read the headline figure and the schedule showing each year’s depreciation and the value left.

Straight Line Depreciation

The simplest and most common method spreads the loss evenly over the life of the asset:

$$\text{annual depreciation} = \frac{\text{cost} - \text{salvage value}}{\text{useful life}}$$

Buy something for 1,000 with a salvage value of 100 and a five-year life, and it loses $(1000 - 100) / 5 = 180$ every year, landing at 100 after five years. Because the amount is the same each year, straight line is the method most accounting uses by default.

Declining Balance

Real items often lose more value early on, so declining balance takes a fixed percentage of the remaining value each year instead of a fixed amount. A new car worth 1,000 dropping 15% a year loses 150 in year one, then 15% of what is left (850), and so on - big drops first, smaller ones later.

Double declining balance is the same idea at twice the straight-line speed: the rate is $2 / \text{life}$. For a five-year life that is a 40% rate each year. It front-loads the loss the most.

Which Method to Use

• Straight line - steady, predictable; the standard for bookkeeping.
• Declining balance - matches things that lose value fast at first, like vehicles and electronics.
• Double declining balance - the most front-loaded; common for equipment that ages quickly.

In every method the value never falls below the salvage figure you set.

A Note on the Presets

The built-in rates for a car, phone, laptop, and so on are common-knowledge estimates to get you started, not a valuation of your specific item. Actual depreciation depends on the make, condition, and market. For tax or accounting decisions, check the rules that apply to you - this tool is a quick estimate, not financial advice.