# How to calculate a deposit or down payment in Excel Purchasing a car or a house is usually a pleasant experience for the buyer. However, most financial institutions require a deposit or down payment to be made towards the total purchase price.

In this week’s tip, we share how to calculate the deposit or down payment for a car. For instance, the cost of the car could be \$15,000 to be repaid over four years at 3% per period. Furthermore, you may want to keep the monthly payment at \$400 per month, but need to calculate the deposit. This is how it can be done.

Applies To: Microsoft® Excel®   2010 and 2013

1. We are going to use the following formula:

=Purchase Price-PV(Rate,Nper,-Pmt)

• PV: calculates the loan amount.
• The loan amount will be subtracted from the purchase price to get the deposit amount.
• Rate: is the interest rate per period. It will be divided by 4 if it is per quarter or 12 if it’s per annum.
• Nper: is the total number of payment periods in an investment, which will be 48(4*12).
• Pmt: is the payment made each period.

2. Place the cursor in cell C6 and enter the formula below.

=C2-PV(C3/12,C4,-C5)

3. This will give you \$3,071.48 as the deposit. By using this method you can calculate the deposit for a car or house using an easy formula. © Sage South Africa Pty Ltd 2019 . All Rights Reserved.