Calculate asset depreciation by finding original cost, residual value, years depreciated, or annual depreciation rate from three inputs.
Customize This Calculator
Build your own version. Describe what you want changed, added, or compared.
Related Calculators
- Present Discounted Value Calculator
- Appraisal Hike Percentage Calculator
- Annual Holding Cost Calculator
- P/A Ratio Calculator
- All Business Calculators
Depreciation Formula
This depreciation calculator uses a straight-line percentage method based on the original cost of the asset. It assumes the asset loses the same percentage of its original cost each year.
To solve for original cost:
To solve for years depreciated:
To solve for annual percent depreciation:
- RV = current residual value of the asset
- OC = original cost of the asset
- p = annual percent depreciation
- Y = number of years depreciated
Enter any three values to calculate the missing one. If you leave the original cost blank, the calculator works backward from the residual value, depreciation rate, and years. If you leave the residual value blank, it estimates the current value after depreciation. If you leave the years blank, it estimates how long the asset has depreciated. If you leave the percent depreciation blank, it calculates the annual depreciation percentage.
Common Depreciation Rates by Asset Type
Actual depreciation depends on accounting rules, asset use, condition, and tax treatment. The table below gives typical straight-line annual rates for general estimating.
| Asset Type | Typical Useful Life | Approximate Annual Depreciation |
|---|---|---|
| Office furniture | 7 to 10 years | 10% to 14% |
| Computers and electronics | 3 to 5 years | 20% to 33% |
| Vehicles | 5 to 8 years | 12.5% to 20% |
| Machinery | 5 to 15 years | 7% to 20% |
| Buildings | 25 to 40 years | 2.5% to 4% |
How to Interpret Depreciation Results
| Result | What It Means |
|---|---|
| Residual value is positive | The asset still has estimated remaining value under the entered depreciation rate and time period. |
| Residual value is close to zero | The asset has nearly fully depreciated based on the inputs. |
| Total depreciation reaches 100% | The asset has fully depreciated under this method. For example, 20% per year for 5 years equals 100% total depreciation. |
| Total depreciation exceeds 100% | The inputs are usually not meaningful for this straight-line model because the asset cannot depreciate below zero in normal accounting use. |
Example Calculations
Example 1: Calculate residual value
You bought equipment for $10,000. It depreciates by 12% per year for 4 years.
The residual value is $5,200.
Example 2: Calculate percent depreciation
An asset originally cost $8,000 and is now worth $5,600 after 3 years.
The annual depreciation rate is 10% per year.
FAQ
Is this calculator using straight-line depreciation?
Yes. It uses a straight-line percentage of original cost per year. That means the same dollar amount is depreciated each year because the percent is applied to the original cost, not the remaining value.
What is residual value?
Residual value is the estimated value left after depreciation. In this calculator, it is the current value after applying the annual depreciation percentage for the number of years entered.
Why do I need to enter exactly three values?
There are four variables in the formula: original cost, residual value, years depreciated, and percent depreciation. Any three are needed to solve for the fourth. If fewer than three are entered, there is not enough information. If all four are entered, there is no missing value to calculate.
