About this tool
Compute the annual depreciation expense of an asset using the straight-line method, the simplest depreciation schedule.
Formula
AnnualDepreciation = (Cost − SalvageValue) / UsefulLife
Worked example
$25,000 vehicle, $3,000 salvage, 5-year life → ($25,000 − $3,000) / 5 = $4,400/year.
Notes
Other methods (double-declining, sum-of-years-digits, MACRS) front-load depreciation. For tax filing in the US, MACRS is required for most business assets.