Things of value a person/business posses that can be sold

What does the "principal" mean with loans and investments?

The original amount borrowed/invested with NO interest

Total value of a business or individual

What is the formula for net worth?

Total assets - total liabilities

An account of income and expenditures over time

What is the best way to pay off a loan to avoid interest accumulation?

Pay it off quicker by making more than the minimum payment

In general a Roth IRA will yield a higher return on investment than a traditional IRA because:

Of the way they are taxed, different fees/penalties

When purchasing an item on credit, where does that money come from?

The bank buys it for you and you promise to pay back

Compound interest differs from simple interest by:

Interest is added to principal PLUS accumulated interest

Who issues credit cards?

Financial institutions such as banks

What is discretionary income?

Income remaining after all necessary expenses have been paid

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EOY Review Unit 5: Financial Literacy

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Questions 24

Answers

1
What are assets?
Things of value a person/business posses that can be sold
Tax free accounts used for retirement
Things for which you are financial responsible
Financial obligations
2
What does the "principal" mean with loans and investments?
The length of the loan/investment period
The original amount borrowed/invested with NO interest
The original amount borrowed/invested with interest
The interest rate you are charged
3
What is net worth?
Total amount of a person's budget spent on fixed costs
Total amount of someone's human capital
Total value of a business or individual
Total amount of a person's budget spent on variable costs
4
The finance charge is the same thing as:
The principal
The original principal plus any interest
The interest rate
The duration of the loan
5
Which is always a higher value? Disposable or Discretionary income?
Disposable
Discretionary
6
Both Roth IRAs and regular IRAs are both a form of an:
Checking account
savings account
Certificate of deposits
Investment/retirement account
7
What is the formula for net worth?
Total liabilities - total assets
P*I*N
Total assets + total liabilities
Total assets - total liabilities
8
What does an investment in stock represent?
Ownership in a company
Being the operator of a company
Ownership of a partnership
Ownership of a sole prioprietorship
9
What is a budget?
An account of expenditures over time
An account of income and expenditures over time
An account of all sources of income over time
An account of income over time
10
A form of longterm debt in which the issuing corporation promises to pay the principal/interest
Time deposits
CDs
Stocks
Bonds
11
What is the best way to pay off a loan to avoid interest accumulation?
Pay it off quicker by making more than the minimum payment
None of the above
Pay it off slower by making the minimum payment
Ask to change your interest rate
12
A budget is essentially what type of math problem?
multiplication
addition
substraction
division
13
When you make a purchase on credit, you are promising to pay the lender the principal PLUS:
Interest
time
more principal
a percentage of your checking account value
14
In general a Roth IRA will yield a higher return on investment than a traditional IRA because:
Of the way they are taxed, different fees/penalties
The investments are less risky
The investments are better and yield a higher rate of return
All of the above
15
What is the formula for simple interest?
y=mx+b
P*I*N
P*(x-m)
P-I-N
16
What does IRA stand for?
Individual Renewal of Assets
Individual Remaining Accumulation
Individual Retirement Accoun
Investment Retirement Account
17
When purchasing an item on credit, where does that money come from?
Your checking account
The bank buys it for you and you promise to pay back
Your investment account
Your savings account
18
What is disposable income?
Income after taxes and other deductions have been taken out
Net pay
take home pay
All of the above
19
Over the long term, which type of interest calculation will result in a higher return?
Simple interest
Chief Interest
Compound Interest
Principal interest
20
Compound interest differs from simple interest by:
How much the original principal is
The length of time of the loan
Interest is added to the original principal only
Interest is added to principal PLUS accumulated interest
21
Which form of investment is the MOST secure with the lowest risk of losing money?
Bonds
Stocks
22
Who issues credit cards?
Financial institutions such as banks
Private individuals
All of the above
Cash advance loans such as Amscot
23
When making debit purchases you are paying cash for that purchase. Debit purchases come from?
A loan from the bank
Your savings account
Your checking account
Your investment account
24
What is discretionary income?
Income left over for savings at the end of the month
Income remaining after all necessary expenses have been paid
Income that was spent only on entertainment
Income after taxes and other taxes have been taken out

EOY Review Unit 5: Financial Literacy Flashcards | StudBud