Final answer:
James will pay a total of $219,600 over 20 years on a $150,000 mortgage with monthly payments of $915.00. The total interest paid will be $69,600, which is 46.4% of the total loan. None of the provided options match the correct percentage.
Step-by-step explanation:
The question asks what percent of the total loan James will pay back in interest if he takes a $150,000 mortgage for 20 years with a monthly payment of $915.00.
To calculate the total amount paid over the 20-year period, we multiply the monthly payment by the number of months in 20 years (20 years x 12 months/year):
Monthly payment = $915
Total payments over 20 years = 20 x 12 x $915 = $219,600
The total interest paid is the total amount paid minus the original loan amount:
Total interest = Total payments - Original loan amount
Total interest = $219,600 - $150,000
Total interest = $69,600
To find the percentage of the total loan that the interest represents, we divide the total interest by the original loan amount and multiply by 100:
Interest percentage = (Total interest / Original loan amount) x 100
Interest percentage = ($69,600 / $150,000) x 100
Interest percentage = 46.4%
Therefore, none of the options given (a. 2.5%, b. 4%, c. 5%, d. 8%) correctly represents the percent of the total loan paid back in interest.