To calculate the percentage of the down payment relative to the purchase price, you can use the following formula:
\[ \text{Percentage} = \left( \frac{\text{Down Payment}}{\text{Purchase Price}} \right) \times 100 \]
Part a:
- Down Payment: $24,000
- Purchase Price: $120,000
Using the formula:
\[ \text{Percentage} = \left( \frac{24,000}{120,000} \right) \times 100 \]
\[ = \left( 0.2 \right) \times 100 = 20% \]
So, the down payment is 20% of the purchase price.
Part b:
If the down payment is $48,000, we can use the same formula:
- New Down Payment: $48,000
Using the formula:
\[ \text{Percentage} = \left( \frac{48,000}{120,000} \right) \times 100 \]
\[ = \left( 0.4 \right) \times 100 = 40% \]
So, a down payment of $48,000 would be 40% of the purchase price.