The SLN(Straight-Line) function uses the Straight-line method of depreciation.

The Syntax for the SLN function is:

`= SLN(cost, salvage, life)`

Straight-line is the simplest method for determining depreciation. The Straight-line depreciation method spreads the amount of depreciation evenly over the life of the asset. Straight-line depreciation is computed by taking the original cost of the asset minus its salvage value then dividing the result of that by the useful life of the asset.

Let’s say that you purchase a piece of equipment costing $50,000. You estimate that you will use the piece of equipment for ten years. You believe that
you will be able to sell the equipment for $1000 at the end of the ten years. The formula for computing the straight-line depreciation is

$50,000 cost – $1,000 salvage value
10 years of useful life = $4900 annual depreciation

The depreciation will be $4900 each year for 10 years.

Note: All of the other depreciation methods have a period argument. Straight-line doesn’t. If you are depreciating an asset over ten years
it doesn’t matter if its year 4 or year 9 the depreciation amount will always be the same.

In this example the company has purchased a piece of machinery that costs $80,000. The company believes that the machinery will have a Salvage value of 1000 at the end of the machines useful life of 6 years.

- Enter the data in the figure below into a new worksheet.
**=SLN**. When entering the SLN function Excel’s intellisense displays the list of arguments**cost**. Click on cell B2 to accept this value for the cost argument. Press F4 to make the cell address absolute. We will be copying this formula to the other cells in the column and we want the cost in each formula to be the same. Enter a comma to take you to the next argument**Salvage**.

Click on cell B3. Press F4.

Enter a comma to go to the life argument Click on cell B4. Press F4. Press Ctrl + Enter

Drag the AutoFill handle on cell B8 down through cell B13.

- At the end of the first year the asset will have a book value that is equal to the cost of the asset minus the first year's depreciation.

Click in Cell C8. Type the equal sign to start the formula. Click on B2. Type the minus sign. Click on B8. Press Enter. - The Book Value for the second and subsequent years would be the Book Value of the previous year minus the depreciation for the current year. In cell C9 type the equal sign to start the formula. Click on C8. Type the minus sign. Click on cell B9. Press Ctrl + Enter.
- Drag the AutoFill handle on cell C9 down through cell C13.