A research facility spends $5000 on new equipment, which depreciates by 20% each year. Calculate the value of the equipment after 3 years.

Mon, 04 May 2026 00:32:19 +0000

**How Research Investment Shapes Value Over Time: A Deep Dive into Equipment Depreciation** Why are discussions around research facilities buying new lab equipment for around $5,000—and how much its value shrinks each year—gaining attention across the U.S. in technical and financial circles? As innovation accelerates and budget transparency grows, stakeholders increasingly seek clear insights into how capital expenditures lose value over time. The math behind equipment depreciation is both a fundamental financial concept and a practical tool for planning, investment, and sustainability forecasting. Understanding how a $5,000 investment depreciates by 20% annually offers clarity not only for labs but for anyone tracking asset lifecycle value in a mobile-first, data-driven era. ### The Economics of Research Equipment Depreciation A research facility allocates $5,000 to acquire essential lab equipment, with industry-standard depreciation reducing its value by 20% each year. This 20% annual loss reflects how physical assets lose purchasing power due to wear, obsolescence, and market dynamics. Far from a simple equation, depreciation models like this one inform budget forecasting, grant planning, and long-term research viability. It’s a lens through which we understand the real cost of innovation beyond the initial purchase price.