The formula to calculate down payment is: {eq}Down\:payment = down\:payment\:percent \times purchase\:price {/eq}. The percent is given as a decimal. If the down payment is 15%, then the number used in the calculation is 0.15 ({eq}15 \div 100 = 0.15 {/eq}). Making the formula for a 15% down payment: {eq}Down\:payment = 0.15 \times purchase\:price {/eq}.
Examples of How to Calculate Down Payment
To purchase a $200,000 house with a 20% down payment, the down payment can be calculated. First, change the percentage into a decimal:
{eq}20 \div 100 = 0.2 {/eq}.
The down payment percent is 0.2, and the purchase price is $200,000. This information is inserted into the formula: {eq}Down\:payment = 0.2 \times $200000 = $40000 {/eq}. For a 5% down payment on the same home, this can be calculated in the same way. First, change the percentage into a decimal: {eq}5 \div 100 = 0.05 {/eq}. Next, put the information into the formula: {eq}Down\:payment = 0.05 \times $200000 = $10000 {/eq}.
This formula can also be used to determine what percentage down payment will be provided for a particular purchase. For a car that costs $30,000, if $5000 is available for a down payment, the percentage can be calculated:
{eq}$5000 = percentage \times $30000 {/eq}
First, divide both sides by $30000:
{eq}$5000 \div $30000 = percentage = 0.167 {/eq}
Change the decimal into a percentage by multiplying by 100%:
{eq}0.167 \times 100 = 16.7 {/eq}.
$5000 paid toward a $30,000 loan is a 16.7% down payment.
This formula can also be used to determine how large of a purchase price is possible with a specific down payment and desired down payment percentage. With a $25,000 down payment, if at least a 10% (0.1) down payment is needed, how large can the purchase price be?
{eq}$25000 = 0.1 \times purchase\:price {/eq}
First, divide both sides by 0.1, then solve for the purchase price:
{eq}$25000 \div 0.1 = purchase\:price = $250000 {/eq}
The maximum purchase price, to have a 10% down payment of $25,000, is $250,000.
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