What is a calculator for depreciation? You can use a tool called a "Depreciation Calculator" to figure out how much value is lost over time on something you own, like a car, machine, or computer. When you buy something new, it costs a certain amount. However, as you use it, its value decreases. Depreciation refers to this decrease in value. How does a Depreciation Calculator work?
Several details are entered into the calculator: How much you paid for the item (the original price)
How long you expect to use it (its useful life)
And sometimes how much you think you can sell it for at the end (salvage value)
The calculator then tells you how much value your item loses each year.
Why should you use one?
To know how much your stuff is really worth after some years
To help with taxes if you use the item for business
To plan when to replace your stuff before it breaks down or becomes too old
An easy illustration: Let’s say you bought a machine for $10,000. You expect to use it for 5 years, and after 5 years, you think it will be worth $1,000.
The calculator will inform you that the machine loses $1,800 annually ($10,000 minus $1,000) 5. So after 1 year, it’s worth $8,200, after 2 years $6,400, and so on.
In short:
A depreciation calculator is like a friend who tells you how much money your possessions lose each year, so you won't be surprised when their value falls.
