Straight-Line — Rate
This formula tells you what percentage of an asset's value you "use up" each year, spread evenly across its life. An "asset" is something valuable a company owns and uses over time, like a delivery truck or a machine. "Depreciation" is just the accounting word for how that asset slowly loses value as it gets older and more worn out. "Useful life" is how many years you expect to use it before replacing it.
To calculate the rate, you take 100% and divide it by the number of years of useful life. If something lasts 5 years, you're using up 100% ÷ 5 = 20% of it each year. It's called "straight-line" because the value drops by the same steady amount every year, forming a straight line if you graphed it.
Reading the result is simple: a higher rate means the asset wears out over fewer years (short life), and a lower rate means it lasts many years (long life). A project manager uses this when budgeting for equipment bought for a project, so they can show how its cost is spread out over time rather than counted all at once.
Think of it like slicing a cake into equal pieces for a set number of days. If the cake must last 4 days, you eat one-quarter (25%) each day so it runs out exactly on schedule.
Imagine your project buys a printer with a useful life of 4 years. The straight-line rate is 100% ÷ 4 = 25%. This means each year you record that the printer loses 25% of its depreciable value. Over 4 years, that adds up to 100% — the whole printer is fully "used up" on paper by the end of its life.
Every PMP formula explained free — plus worked examples and practice in PMP Math, and full timed mocks in the simulator.