Financial Literacy Vocab Review

Question 1

An account you with a financial institution that helps you accumulate and save money and earn interest at the same time.

Accepted Answer

Savings Account

Question 2

Card that enables holder to charge expenses for purchases or to get money, often with interest.

Accepted Answer

Credit Card

Question 3

Whenever choices are made, the cost of something expressed in terms of what had to be given up to obtain it.

Accepted Answer

Opportunity Cost

Question 4

A rise in value or price.

Accepted Answer

Appreciation

Question 5

Decline in a product’s value that starts the moment a product is purchased.

Accepted Answer

Depreciation

Question 6

A plan for managing money, dividing up expected income and expenses among spending and saving options in a given period.

Accepted Answer

Budget

Question 7

Expenses that are not Fixed, or that can and will change.

Accepted Answer

Variable Expenses

Question 8

The amount of a loss you must pay out of your own pocket before the insurance company will step in and pay the rest.

Accepted Answer

Deductible

Question 9

Setting aside money for future income, benefit, or profit to meet long-term goal.

Accepted Answer

Investment

Question 10

Distributing funds among different types of investments to minimize overall risk.

Accepted Answer

Diversification

Question 11

Payment for use of someone else’s money; usually expressed as an annual rate in terms of a percent of the principal.

Accepted Answer

Interest

Question 12

Loan to buy real estate, such as land or a home.

Accepted Answer

Mortgage

Question 13

A certificate issued by a bank to a person depositing money in an account for a specified period of time.

Accepted Answer

CD

Question 14

The finance charge or total amount it costs per year to use credit, calculated as a percentage of the amount borrowed.

Accepted Answer

APR

Question 15

Expenses that cost the same amount every time.

Accepted Answer

Fixed Expenses

Question 16

An amount of money spent to buy something or do something.

Accepted Answer

Expense

Question 17

Basic financial knowledge, including an understanding of banks and the banking system, and financial markets.

Accepted Answer

Financial Literacy

Question 18

The actual interest rate an account pays per year with compounding included.

Accepted Answer

APY

Question 19

A situation in which interest is earned on previously earned interest in such a way that earnings accumulate over time.

Accepted Answer

Compound Interest

Question 20

A compulsory payment by individual/organizations to the government.

Accepted Answer

Taxes

Questions 20