|
What is interest? |
Amount owed for borrowing money |
|
Relationship between time/interest rate |
Longer time equals higher interest rates |
|
To earn as much interest as possible |
Open savings account that earns compound interest and has highest interest rate |
|
Types of saving vehicles |
Certificate of deposit (CD) Savings account Money Market Account |
|
True about saving vehicles |
People should evaluate different forms of savings vehicles based on needs |
|
Which savings vehicle requires highest minimum balance |
Certificate of deposit |
|
Which account gives you the least access to your money |
Certificate of Deposit |
|
Responsiblities of Federal Reserve |
Supervising the reserve banks Maintaining a stable banking system Setting the nation’s monetary policy |
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Financial institution that has membership requirements |
Credit union |
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Type of account that is most liquid |
Checking account |
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Primary responsibility of Federal Reserve |
Establish monetary policy |
|
Savings account offer ________ interest rates than checking accounts. It is ________ to access your money in a saving account than checking account |
Higher;Harder |
|
Type of account that have the highest interest rate |
Certificate of deposit |
|
3 parts of Federal Reserve System |
Reserve banks, Federal Open Market Commitee, and Board of Governors |
|
Which fees would likely be the highest |
Overdraft fee |
|
Features of credit unions |
Credit unions are typically owed and ran by their members. Credit unions limit membership to certain people of groups. |
|
Payment types require you to pay upfront |
Money orders Cashier’s check Pre-paid card |
|
Checks and Debit cards both |
Withdraw money directly form a bank account |
|
Debit cards allow you to |
Draw funds directly from your checking account |
|
NOT true about credit cards |
Best payment type to use to stick to budget |
|
Payment method that charges highest interest rate |
Payday loans |
|
Tells you how much credit card interest will be if you only pay minimum balance each month |
Annual Percentage Fee |
|
Payment types that helps you stick to a budget |
Debit cards |
|
Look for low APR if |
You plan on carrying a large balance on credit card |
|
Credit limit |
Amount of interest you are charged on credit card purchases |
|
Annual percentage rate on credit cards determines |
Amount of interest you are charged on credit card purchases |
|
Credit scores |
Reflect how likely individuals are to repay their debts Range from low 300’s to the mid 800’s Each person has three credit scores |
|
T or F The more money you make, higher your credit score |
False |
|
Having a good credit score is important because |
It impacts your ability to be approved for banks loans |
|
Big three credit reporting agencies |
Experian TransUnion Equifax |
|
True of someone with a low credit score |
Might not be able to get the apartment they want. More likely to miss a payment than someone with a high credit score |
|
Which influences you credit score most |
Payment history |
|
Credit score represents |
Numerical rating that expresses how likely you are to repay your debts |
|
What would improve your credit score |
Paying off your credit card bill |
|
Which could damage your credit score |
Paying credit card bill late Opening 3 credit cards at once Ignoring a late payment notice |
|
The return on investment from education is typically the highest for |
Someone with a 4-year degree |
|
Type of financial aid that does not require you to pay back |
Grants |
|
Loans that will typically offer the lowest interest rate |
Federal student loan |
|
Loan that requires you pay interest accumulated during college |
Unsubsidized federal loan |
|
Grace period |
Period after graduating or leaving school before you must begin paying back student loans |
|
What is true about federal student loans |
Interest rate on your loan will be fixed over time |
|
Renting provides ________ flexiblity but can lead to _________ costs in the long term. |
Greater;Higher |
|
Owning provides _________ flexibility but can lead to _________ costs in the long term |
Less; lower |
|
Typically homes ______ over time and cars __________ over time |
Appreciate; Depreciate |
|
Lease |
A contract outlining the terms under which a landlord agrees to rent property to a tenant |
|
One reason to buy a home instead of rent a home is |
Homes have potential to appreciate in value over time |
|
Mortgage |
Type of loan used to buy property |
|
Insurance helps you |
Financially protect against unexpected accidents |
|
Covered under homeowners insurance but not renter insurance |
A tree branch breaks into your bedroom window during a storm |
|
Regular payment is called a |
Premium |
|
Which type of insurance will require you to pay the least out of pocket |
Low deductible plan |
|
Tax you pay when making a profit from selling a house |
Capital gains tax |
|
Net pay |
How much you’ve made during a pay period |
|
YTD Net Pay |
How much you’ve made this year |
|
Why might you complete a 1040 instead of 1040EZ |
You own a home |
|
Best way to protect against identify theft |
Change online account passwords frequently |
|
Consumer protection laws might result in |
Fewer unwanted telemarketing calls |
|
Identify thieves can use your personal information to |
Open a credit card Sign up for electricity service Get a cell phone contract |
|
Safest way to dispose of old bank account statements |
Shred them |
|
First action you should take if you suspect there has been a fraudulent charge on your credit card |
Contact the credit card company to report the fraudulent charge |
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What activitiy might require you to provide your social Security number |
Starting a new job |
|
How can investors receive compounding returns |
By investing their earnings back into their original investment |
|
Dividends |
Distribution of a small percentage of profits to shareholders |
|
When you buy a _________, you are loaning money to an organization |
Bond |
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What happens when a bond becomes due |
The issuer will pay you back, plus interest |
|
Stocks |
Allow investors to own a portion of the company |
|
Bonds |
Are loans to the company |
|
The __________ the risk, the ___________ the potential return/loss |
Higher;higher |
|
Primary reason to issue a stock |
To raise money to grow the company |
|
Investment type typically carries the least risk |
Savings account |
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