This method assumes a constant depreciation value per year.
Assuming that the price of a depreciating asset is and its salvage value after years is , the annual depreciation is:
For our example, the annual depreciation would be
and its salvage value after 
years is 
, the annual depreciation is:
![\[ \frac{P-S}{N} \]](images/etsug_invdetails0004.png){kind=small}
![\[ \frac{\$ 20,000-\$ 5,000}{5}=\$ 3,000 \]](images/etsug_invdetails0005.png){kind=small}