The BMW M5 retails for $90,000 (all taxes included). BMW Financial Services offers a 3-year car loan at an interest rate of 5.5% with end-of-month payments.  The payments are $2,717.63. How much interest will you pay over the life of the loan (in the blended payments)? 

To calculate how much interest you will pay over the life of the loan, we need to determine the total amount paid over the term of the loan and then subtract the initial principal (the car's price) from that total.

Here’s how to approach it:

1. **Total Payments Over 3 Years**:  
   You are making monthly payments of $2,717.63 for 36 months (3 years).
   \[
   \text{Total payments} = 2,717.63 \times 36 = 97,834.68
   \]

2. **Total Interest Paid**:  
   The interest paid is the difference between the total payments and the principal (the price of the car).
   \[
   \text{Total interest} = \text{Total payments} - \text{Principal}
   \]
   \[
   \text{Total interest} = 97,834.68 - 90,000 = 7,834.68
   \]

Thus, the total interest paid over the life of the loan is **$7,834.68**.

Would you like more details, or do you have any questions?

Here are 5 follow-up questions:
1. How would the interest change if the loan term was extended to 4 years?
2. What would the monthly payment be if the interest rate dropped to 4.5%?
3. How is the interest on a loan typically calculated?
4. What would the impact of a higher down payment be on the overall interest?
5. What are some ways to reduce the total interest paid on a car loan?

**Tip:** Paying extra each month or making one large payment can significantly reduce the total interest paid over the life of the loan.

The BMW M5 retails for $90,000 (all taxes included). BMW Financial Services offers a 3-year car loan at an interest rate of 5.5% with end-of-month payments. The payments are $2,717.63. How much interest will you pay over the life of the loan (in the blended payments)?

Find out how to calculate the total interest paid on a $90,000 BMW M5 loan over 3 years at an interest rate of 5.5%. Understand key concepts like monthly installments, total payments, and interest calculation. Suitable for students in Grades 10-12.

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