Final answer:
The correct total finance charge for Jane's $5,000 loan with a 2% APR over 5 years, with monthly payments of $87.64, is $258.40. There seems to be a discrepancy as the provided answer choices incorrectly state $318.40.
Step-by-step explanation:
Jane received a loan offer of $5,000 with a 2% APR for 5 years, and her monthly payments are $87.64. To find the total finance charge, we must calculate the total amount paid over the life of the loan and subtract the initial loan amount.
Total amount paid = Monthly payment × Number of payments
Total amount paid = $87.64 × (12 months × 5 years) = $87.64 × 60 = $5,258.40
Now, subtract the original loan amount from the total amount paid to find the finance charge.
Total finance charge = Total amount paid - Loan amount
Total finance charge = $5,258.40 - $5,000 = $258.40
The correct answer is not listed among the options provided. Assuming there might have been a typo in the options, the correct total finance charge for the loan is $258.40.