Car Loan Payment Calculation for Zach

To calculate Zach's total payback amount for his car loan over 5 years, we first need to determine his monthly payment. Zach bought a car for $18,900 with a 5% interest rate over 5 years. Using the formula to calculate the monthly payment amount, we get:

Monthly Payment (PMT) = P x (r/n) / (1 - (1 + r/n)^-nt)

where:

P = principal amount = $18,900

r = annual interest rate = 5% = 0.05

n = number of payments per year = 12 (monthly payments)

t = total number of payments = 5 years x 12 months/year = 60 months

Plugging in the values, we get:

PMT = $18,900 x (0.05/12) / (1 - (1 + 0.05/12)^-60)

PMT = $18,900 x 0.00416667 / (1 - (1.00416667)^-60)

PMT ≈ $356.67

Therefore, Zach's monthly payment for his car loan is approximately $356.67. Each year, Zach will pay $356.67 x 12 = $4,280.04. Over the 5-year loan period, Zach's total payback amount will be $4,280.04 x 5 = $21,400.20.

Hence, Zach's total payback amount for his car loan over 5 years is $21,400.20.