Final Study Set

Shawn made $32,500 last year. He is single with no children. He does not have any deductions to itemize. He should use the _____ to file his tax return.

1040EZ tax form

what are some examples of finance charges?

fees, service charges, and interest

You read a newspaper article in the business section of a newspaper. The author is a licensed financial advisor with a degree in finance. The article is about setting aside money for your kid's college tuition. This information is _____.

reliable but irrelevant

Jim purchases land hoping that the value of the land will increase over the next five years. What risk does Jim face?

losing money in an investment

Jim purchases land, hoping its value will increase during the next five years. What risk does Jim face?

losing money in an investment

Zach has heard the company where he works is not making enough in profits and is facing rough times. What risk does he face?

loss of job

An online savings account _____.

offers higher interest rates because they don't have the overhead that standard banks have

Zachary, a college student, watches a financial show on television. The host is a well-known financial advisor. He is talking about borrowing from a 401 (k). This information is _____.

reliable but irrelevant

You do an Internet search and the results list includes the Web site www.FDIC.gov. This information is _____.

reliable

You receive a college investing kit in the mail from a reputable investment company. This information is _____.

reliable

Select all of the ongoing costs associated with renting: rent payment security deposit utility bills homeowner's insurance renter's insurance

rent payment utility bills renter's insurance

true or false: Taking a self-assessment test is a good way to learn about your self and careers that are suitable for you.

true

true or false: The government uses the revenue from taxes to pay for goods and services for the community.

true

True or false: A traditional loan has a variable interest rate.

False

True or false: Your financial decisions will only affect yourself and nobody else.

False

John looks at his budget and notices that, because of additional expenses this month, he will be unable to pay all of his bills. He is thinking about getting a cash advance but isn't sure. What should John do?

Find reliable and relevant information, or possibly visit a representative from the bank to find out about special fees.

FAFSA

Free Application for Federal Student Aid; an application to obtain financial aid such as grants or student loans

Jason's balance in his checkbook register is $20.60. He receives his bank statement and sees that the balance is $50.60. He notices that a check in the amount of $30 does not appear on the statement. Is the balance in his checkbook register correct?

No.

credit union

a nonprofit financial institution formed by a large corporation or organization for their employees and members

retirement account

a plan for setting aside money to be spent after retirement

A credit report is a _____.

a report prepared by a credit bureau that shows details of an individual's credit history

tax return form

a tax form that an individual completes to calculate how much is owed to or refunded by the IRS

W-2 form

a tax from that an employer sends to employees after the end of the year to list income and amount paid in taxes

service credit

a type of credit or promise to pay for services, such as phone, electricity, and water

stock symbol

a unique set of letters assigned to a company for the stock market

What does FDBA stand for?

The Fair Credit Billing Act

Loan application fee

This is the fee paid to process the paperwork to see if an individual is accepted for the loan. Sometimes this includes the credit report fee and appraisal fee.

true or false: Mutual funds are the riskiest type of investment.

false

assets

items owned that could be sold for cas

Mr. Stanley started a new business and created a product that raises the standard of living for people who use wheel chairs. Mr. Stanley would be considered _____.

an entrepreneur

An account with a financial institution that is used to pay taxes and insurance is called _____.

an escrow account

identity theft

the crime of stealing an individual's personal information in order to gain from that person's finances

trade

to buy or sell stock

The purpose of advertising is _____.

to convince consumers that they can benefit from a product or service

It is a consumer's responsibility to stay informed about product recalls.

true

True or false: Criteria are standards for evaluating something.

true

True or false: Jimmy did not plan to buy gum and a magazine at the checkout counter. These are impulse purchases

true

true or false: An entrepreneur takes a risk to create a new product or a better way to operate a business.

true

true or false: The local government uses property taxes to pay for goods and services in the community.

true

true or false: The purpose of a budget is to track your income and your spending.

true

To obtain your credit report, you should _____.

visit the official web site and complete the necessary steps

rent

to take possession of and use property by paying a set amount

When writing a check, you must complete all these steps except _____.

signing the back of the check

what is a spreadsheet?

software that contains rows and columns used to make calculations, organize information, and make comparisons

Tips are considered _____.

taxable income

liquidity

the ease with which an investment can be turned into cash without losing its value

periodic rate

the interest rate one is charged for one payment period, a rate that is usually the APR divided by twelve

bodily injury limit

the most the insurance company will pay

Julia bought a used car. She found out after she made the purchase that the car had previously been in an accident. What right was Julia denied?

the right to information

lease (v.)

to give temporary possession to another individual

How much would Vincent have in his account after three years if he started with $100 and earns 5 percent, compounding annually?

$115.76

List three benefits of being financially responsible.

1. Good credit score. 2. You'll have extra money in case you lose your job. 3. You can make business deals or take out loans without being swindled.

If you pay the balance on your credit card each month, the _____ is the most important factor to consider when selecting a credit card.

APR

In one to two sentences, explain why citizens pay taxes.

Citizens pay taxes so that they can receive public services, such as medical help, police and fireman, new roads, etc.

Select all the types of retirement accounts.

IRA, 401k and 403b

What does FCRA stand for?

The Fair Credit Reporting Act

checkbook register

a booklet used to track deposits and withdrawals from a checking account

All of the following are financial risks, except _____.

buying a warranty

True or false: The Cooling Off Rule lets you return an item to a store within one year of purchase.

false

rewards

something that causes or increases personal satisfaction

demand

the desire or need for a product or service

government-backed mortgages

FHA and VA loans

How should you make a difficult purchasing decision?

Gather information about the product and use the PACED decision-making process.

Jeff cannot find any of his receipts for entering into his budget. In addition, he cannot find any of his bank statements. What should Jeff do?

Get organized by purchasing some file folders and filing his paperwork.

lease (n.)

a contract to lend property to another for a specific amount of time and for a certain amount of payment

share

a single unit or equal part of stock

Visit the _____ when you want to deposit a check.

bank teller

A stock broker _____.

buys and sells stocks

True or false: A saving and investing plan is part of a good financial plan.

cost that changes

installments

equal payments usually made over several years

Select each type of financial aid.

grants scholarships student loans

Instead of getting a student loan which needs to be paid back with interest, what are some alternatives to help pay for the costs of college?

grants and scholarships

consumer rights

laws and regulations that protect consumers when buying products or services

net pay

take-home pay; the portion of the wages that the employee actually gets to take home

revenue

the income a business makes

true or false: One upfront cost of renting an apartment is the security deposit.

true

Exempt means _____.

you are free from deducting federal income tax from paychecks

How much would Keith have in his account after three years if he started with $200 and earns 2 percent interest, compounding annually?

$212.24

Diana's gross pay was $890 and her total deductions were $89. What is her net pay?

$801

There are several steps to opening a savings account. Select all of these steps.

1. Collect all the required information. 2. Choose a director for the account. If you are under the age of 18, you'll need a director on the account, usually a parent. 3. Go to the bank to sign the necessary bank forms. The director of the account must sign the forms, as well. 4. Fill out a deposit slip and deposit at least the minimum amount of money.

Name three or four public services that are made available through the revenue from taxes.

1. New roads 2. Medical help (building of public hospitals) 3. Public education 4. Police/fireman

Select the activities that can help you decide and plan your career path.

1. exploring career options 2. taking a self-assessment or career test 3. using the PACED decision-making process 4. writing goals

Which of the following should be considered when selecting a stock?

52-week high 52-week low P/E ratio dividend

What is an incentive for a person to contribute to an IDA?

An organization matches the amount deposited.

What does APR stand for?

Annual Percentage Rate

What are some fees that can result in finance charges?

Credit report fees Appraisal fee Loan application fee Lock-in fee Loan origination fee

What is the formula to calculate the debt to income ratio?

Debt-to-income ratio = debt / income x 100

True or false: Erin is in high school. She decides that she will set aside money to put in her savings account each week from the money she makes babysitting. This is a bad habit.

False

If you wanted to get information about the most recent scams that have been occurring, what could you do?

Google is a wonderful thing.

Edmund would like to sell stock. What should he do?

He should communicate with his broker that he wants to sell.

John wants to know how much he should pay for a particular used car. What should John do?

He should find reliable and relevant information; perhaps look up the information in the Kelly Blue Book.

How much debt is considered excessive?

If someone pays more than 36 percent

What is Form 1040?

If you do not qualify to use the 1040EZ or 1040A, use this form.

IRS

Internal Revenue Service; a government agency that is responsible for collecting taxes

Who is not spending wisely?

Lauren has been thinking about getting a puppy for a long time. She walks by the pet store at the mall and decides to get a puppy

Ashley bought an expensive pair of jeans. Her friend got the same pair of jeans for almost $20 less. What tip could have helped Ashley?

Look for bargains.

Annual fee

Some companies charge annual fees of $20, $50, or more for just carrying their credit cards.

What does FDCPA stand for?

The Fair Debt Collection Practices Act

True or false: A misconception is a misunderstanding.

True

True or false: Financial literacy includes information about income, banking, loans, and credit cards.

True

title

a certificate indicating ownership of property

stock

a certificate representing a share of ownership in a company

What is the rule of 72?

a formula used to calculate how many years it will take your money to double

ARM; Adjustable Rate Mortgage

a loan with an initial fixed interest rate that then becomes variable

Each of these is a retirement account, except _____.

a mutual fund

claim

a request for payment from an insurance company

What is the most important factor to consider when selecting a credit card if you pay the balance every month on time?

annual fee

APY

annual percentage yield

Tammy wants to track her spending in categories. What tool should she use?

budget software

Diversifying means _____.

buying and selling a variety of stock

The first step in setting goals is _____.

calculating your networth

Randy has a hard time remembering to pay his bills on time. Which feature would you recommend for Randy?

calendar

Employee salaries, equipment purchases, consultant fees, and legal fees are all examples of _____.

costs

Mike takes a card out of his wallet at the grocery store and swipes it to pay for his groceries. What did Mike use?

debit card

Lisa owns stock in Company ABC. Company ABC sent out an earnings report and gave each of the stockholders an amount of money based on how much stock they owned. This is a _____.

dividend

gross pay

earnings before deductions for work or from other sources, such as rent or investment

true or false: Financial literacy means knowing how to make financial decisions.

false

true or false: It's hard to determine if the bank's web site is secure.

false

true or false: PACED is a process for finding reliable information.

false

true or false: Phishing is looking for and reporting online scams.

false

true or false: Rule of 72 is a formula that helps you calculate how much money you will have in your account in 72 months.

false

true or false: The loan period does not affect the total cost of the loan.

false

true or false: There are only four types of insurance; health, life, homeowner's, and automobile insurance.

false

true or false: When opening a checking account, the bank does not run an account verification if you provide a state-issued ID.

false

true or false: When you receive a savings bond worth $100, you can cash it for $100 right away.

false

true or false: When you want to open a new bank account, speak to a loan officer.

false

Matt expects to get his first paycheck today. What deductions may be listed on his paycheck stub?

federal tax state tax Medicare Social Security

When you get in a car accident, you should _____.

file a claim

Taylor wants to generate a graph to show how she is doing at saving. What tool should she use?

graphic software

A dividend is _____.

money a company shares with the stockholders

impulse purchases

purchases that are not planned

In order to maintain a checking account, you need to record all of your transactions in a check register and _____.

reconcile the checkbook

There are many different sources of income. Usually, most of an adult's income comes from _____.

salary

One reward of starting your own business is _____.

setting your own work schedule

Relevant information is _____: 1. appropriate for your age 2. hard to read 3. mostly for adults 4. suitable for your situation

1. appropriate for your age 4. suitable for your situation

Select the different types of taxes: 1. sales 2. property 3. elective 4. income 5. voluntary

1. sales 2. property 4. income

Which is the shortest and simplest tax form?

1040EZ

Manny has his money in a savings account earning 3 percent interest. How long will it take his money to double?

24 years

Carlos would like to start saving for his son's college expenses. Which type of savings account should Carlos open?

529 plan

Sandra has a young child and would like to set money aside for her college education. Which type of savings option should Sandra choose?

529 plan

Which of the following loans will have a higher total cost? A loan for $5,000 at 3.5 percent over a loan period of four years. A loan for $5,000 at 3.5 percent over a loan period of six years

A loan for $5,000 at 3.5 percent over a loan period of six years

Ramon took out a car loan with an interest rate of 10 percent and paid $100 in loan application fees. What term describes the amount of interest Ramon will pay?

APR

The deadline to file your tax forms is _____.

April 15

Brian received a phone call today asking him to donate to a disaster relief fund. He would like to donate some money. What should Brian do?

Ask for the name of their organization and look for information about them to make sure they are authentic before he donates.

Select all the things that smart shoppers do.

Avoid high-pressure sales techniques. Know that offers that sound too good to be true usually are. Don't give out their credit card number for any purpose other than to make a purchase. Don't buy anything on terms they don't fully understand. Find out about refunds, returns, and cancellation policies

Carl started earning a paycheck and wants to invest some of what he earned. In this situation, why is it important for Carl to be financially literate?

Because investment is bascially a guessing game about what stocks are going to do well and which ones aren't. Financial literacy helps to determine which stocks would be a good investment, as well as when would be a good time to pull back your investments.

Holly deposited $7,000 in a CD and will get charged penalties if she makes withdrawals within five years. However, she will need this money to pay for college tuition next year. What saving and investing principle should Holly have followed?

Consider how long you plan to keep your money in the investment.

Select each of the PACED steps below.

Define the problem. List the alternatives. Select the criteria. Evaluate the alternatives. Make a decision.

How does one calculate the periodic payment?

Divide the APR by twelve and multiply that by the the total amount due.

FDIC Deposit Insurance Regulations

FDIC insurance protects your money if the bank fails.

true or false: Annual compounding pays more money than daily compounding.

False

true or false: Supply is the amount needed.

False

true or false: Visit the branch manager when you want to deposit your paycheck.

False

In three or four sentences, describe how a person buys and sells stocks.

First you need to clear any debts that you may owe. You then choose a stock broker and open an account. You then need to deposit money and communicate with the broker about what stock you want to buy and listen to his advice as to what you should actually buy. You then buy a small portion of a company, and when the company does well you are paid in dividends. If it does poorly, you lose money.

List at least three responsibilities of consumers.

Gather information about products and services before making a purchase in order to be aware of price, quality, and the product specifications. Read instructions on products and use them only as intended. Take action. Report faulty products, fraudulent activity, and any other violation of consumer rights. Stay informed about products that you buy in order to be aware of product recalls. Insist on compensation if you are not satisfied with your purchase. Consider the impact of your purchases on others, including choosing products that don't harm the environment.

Select all the responsibilities of consumers.

Gather information about products and services before making a purchase to be aware of price, quality, and the product specifications. Read instructions on products and use them as intended. Take action and report faulty products, fraudulent activity, and any other violation of consumer rights Stay informed about products that you buy to be aware of product recalls. Insist on compensation if you are not satisfied with your purchase. Consider the impact of your purchases on others and choose products that do not harm the environment.

If you wanted to find out what the average salary is for a certain occupation, what could you do?

Google it

Grace wants to be an astronaut. Which of the following goals would be appropriate for her?

I will become an astronaut by completing an undergraduate degree in aerospace engineering and a doctoral degree in biology. I will attain this goal by age 30.

balance transfer fee

If you transfer your balance to another credit card account, you might be charged this fee.

Why does the money in a savings account grow?

It earns interest, plus it earns interest on the interest.

Why is it important to have insurance?

It's important because most people don't have thousands of dollars in case of an injury, car wreck, surgery, home invasion, etc.

Holly has many different types of investments. She does not understand a few of her investments. She is having a hard time figuring out their value and whether she should sell them. What principle of saving and investing should Holly have followed?

Keep investments simple

Name at least four factors that a lender investigates when considering whether you are creditworthy.

Living expenses, money owed, and current income, current and previous employers, credit history

What are some tips to maintain good credit?

Protect your credit card and account numbers to prevent unauthorized use. Quickly report lost or stolen credit cards. Open only a few credit cards. Too many credit cards can make overspending tempting. Only pay for something with a credit card if you can pay the full balance when the balance is due. Look for credit cards that have no annual fees and lower interest rates. Read the terms of the credit carefully and make informed decisions. Don't take cash advances. They are expensive. Pay off your total balance each month. If you cannot pay the total balance, try to pay as much as you can. Don't spend more than your credit limit.

What should you do with your paycheck stub?

Save it for your records.

Alicia has been keeping money in her room that she has earned from babysitting. What should Alicia do with this money?

She should become more knowledgeable about her options for savings accounts.

Amy wants to invest money for two years. She doesn't know which investment is best for her. What should Amy do?

She should become more knowledgeable by talking with a financial adviser, reading books, or by taking a class.

Miranda thinks she's ready to invest in the stock market. What should she do to prepare?

She should have paid off credit card balances, saved up an emergency fund, and learned the basics about investing.

Jordan already has a checking account. She wants to deposit a check that she received from her aunt for her birthday. What should Jordan do?

Sign the back of the check, complete a deposit slip, and bring it to the teller.

An employer takes a deduction from your paycheck for federal taxes. Where does this money go?

The money is sent to the federal government to pay for goods and services for the community.

Why would a company contribute to an IDA account?

The organization wants to encourage low-income families to save money on a regular basis. The purpose of IDAs is to help people become financially independent. Organizations involved in IDA programs want to help low-income families achieve self-sufficiency.

The Truth in Lending Act

This act requires lenders to disclose certain information about the loan. A Truth in Lending disclosure will include the following information: APR, finance charges, amount financed, and total payment.

Appraisal fee

This is the fee paid for an appraiser who provides a value for the item being purchased, such as a house.

True or false: Financial literacy is the knowledge about money and what you do with money.

True

True or false: Reliable information is information you can trust with certainty.

True

True or false: Sam will finish high school this year. He does not think he needs any further education. This is a misconception.

True

True or false: When you are accountable, reliable and dependable you are acting responsibly.

True

true or false: A career goal should be measurable, detailed, and include a plan.

True

If you wanted to get information about product recalls, what could you do?

Visit the Consumer Product Safety Commission Web site and look for product recalls.

After the end of the year, you can expect to receive a form from your employer stating how much you earned and how much you paid in taxes for the year. This form is the _____.

W-2 form

Molly is getting ready to file her tax return. She works and has a savings account. What tax forms does she need?

W-2 form from her employer, tax forms from the bank, and a tax return form

If you wanted to find the job description for a certain job, where should you look?

Web sites or books about careers

In two to three sentences, describe how making minimum payments on credit card balances increases the total cost.

When making minimum payments to credit card companies, you are also charged an interest fee for every minimum payment you pay. The sooner you can completely pay off your debt the less interest one will accrue and ultimately pay.

How do stocks work?

You buy a small portion of a company, and when the company does well you are paid in dividends. If it does poorly, you lose money.

A short-term mortgage in which small payments are made until the completion of the term, when the entire balance is due, is _____.

a balloon mortgage

debit card

a card that can be used to pay for products and services or be used at an ATM; looks similar to a credit card, but the payment amount is subtracted directly from an account

Medicare

a federal program that pays for health care for people age 65 and older

Commission is___

a fee paid to an employee for their sale or services

scam

a fraudulent scheme used to make money

warranty

a written guarantee given to the purchaser of a new appliance, automobile, or other item by the manufacturer or seller, usually specifying that the manufacturer will make any repairs or replace defective parts free of charge for a stated period of time

The annual percentage yield (APY) is the _____.

amount of interest you'll earn in one year from a savings account

escrow

an account with a financial institution used to pay taxes and insurance

withholding allowances

an amount an individual enters on a W-4 form that helps an employer calculate the amount of income tax to subtract from an employee's paycheck

debt

an amount of money that is owed to a bank, a credit card company, a store, or another individual

Debt is _____.

an amount of money that is owed to a bank, credit card company, store, or another individual

stock market

an organized way for people to buy and sell stocks and for corporations to raise money. The New York Stock Exchange and NASDAQ are the biggest in the United States

Select all of the fees a credit card may have.

annual fee APR balance transfer fee cash advance fee late fee overdraft fee over-the-limit fee

What kind of things involve financial literacy?

applying for a credit card using a credit card to make a purchase paying taxes opening a checking account deciding to rent an apartment

How often should you get a credit report?

at least once a year

Eva would like more information on services available at her bank. Which of the following resources could she use?

bank teller printed material customer service representative at a bank bank Web sites

Select all of the possible consequences for excessive debt.

bankruptcy low credit score subprime loans foreclosure repossession

An organization whose purpose is to receive and investigate customer complaints of dishonest business practices and provide complaints and reports from investigations to the public is the _____.

better business bureau

How does one invest in real estate?

buy and sell land, houses, and buildings. At times, the value of property increases at a steady rate. However, investing in real estate may be risky because the value of land and houses may decrease, or real estate may become difficult to sell.

Select all the strategies you can use to manage risks.

buy health insurance have an emergency fund have a warranty become informed

A cash advance is _____.

cash borrowed from a credit card account

cash advance

cash borrowed from a credit card account, for which cash advance the credit card company charges fees and higher interest rates

CD

certificate of deposit; an account where you leave your money for a set period of time and are unable to make deposits or withdrawals during this time unless you pay penalties

When you receive your paycheck stub, you should _____.

check it to make sure it is correct and save it for your records

Name three advantages of banking online.

convenience; accessibility even when you travel; open access all day, every day; quick transaction speed; efficiency because you can manage different accounts at one site.

Select the advantages to banking online.

convenient efficient accessible from anywhere quick transaction speed always open

A fixed expense is a _____.

cost that stays the same from month to month

List at least three of the costs that make up a mortgage payment.

down payment (principal) closing costs; taxes; interest; insurance. monthly loan payments

An example of financial irresponsibility is _____.

driving without car insurance making an impulse purchase

Select all of the factors that affect income: education skills college courses experience supply and demand type of car you drive

education skills experience supply and demand

Some factors that affect income are _____.

education, skills, supply and demand, and experience

The company you work for deposits money into your retirement plan. This is an example of a/an _____.

employee benefit

To help you decide on a career, you should _____.

explore career options, take a self-assessment, apply the PACED decision-making process, and write goals

Adrianna will be a college freshman soon and she is struggling to make a career choice. Which activities will help her?

exploring careers reflecting on skills, interests, values, and personality traits using the PACED decision-making process taking a career test

True or false: Net worth is the amount you have,plus the amount you owe.

false

true or false: A paycheck stub documents just your gross pay.

false

Lilly would like to gather more information about investing in stock. What resources can she use to find out more information?

full-service stock broker, books, financial articles, and financial advisers

Spending wisely ____.

helps you have control over your finances

The federal government relies mostly on revenue from _____.

income taxes

Adults pay _____ taxes.

income, property, and sales

PMI

insurance you must pay on most loans when you make a down payment of less than 20 percent

What is private mortgage insurance?

insurance you must pay on most loans when you make a down payment of less than 20 percent

finance charges

interest and fees charged for making purchases using a credit card

Buying or selling stock is _____.

investing

diversification

investing in a variety of investments in order to limit losses in the event of a sharp decline in a particular type of investment

Cole has a credit card bill of $3,100. His credit limit is $3,000. Is Cole using credit responsibly or irresponsibly?

irresponsibly

what are some strategies to avoid certain financial risks?

keeping your money in a safe place; financial planning or meeting with a financial adviser; obtaining health, car, home, and disability insurance; protecting your personal information and your identity; becoming educated and informed in order to avoid scams; having an emergency fund; buying products with warranties; knowing consumer rights.

credit limit

maximum amount of money that an individual is authorized to use

When selecting the best checking account, you should consider _____.

minimum balance, fees, and interest

A misconception is a _____.

misunderstanding

Financial literacy is the knowledge about _____.

money

wages

money received for work

interest

money the bank gives you when you keep your money in one of their accounts

How do you calculate monthly mortgage payments?

mortgage payment = principal + interest + property tax + home insurance + PMI note: be sure to calculate monthly property tax and home insurance

A collection of money from a group of investors used to buy different investments is a _____.

mutual fund

Select all of the common investment alternatives.

mutual fund retirement investment money market account real estate stock IDA

Select all the parts in a financial plan.

net worth statement financial goals savings and investing plan insurance plan budget

what are some investment tools?

online trading accounts for buying and selling stock from any device that can connect to the internet; online portfolios; (Note: Online stock brokerage firms, such as E-trade and Fidelity, offer portfolios to help you quickly view your investments and their worth.) spreadsheets to list your investments; online calculators to calculate compound interest or the value of a savings bond.

Spreadsheet software can be used to do all the following except _____. create a budget calculate your net worth open a savings account create a graph

open a savings account

When selecting the best financial institution for you, you should consider each of these factors except _____.

other people who bank there

A variable expense is a _____.

plan for saving and spending your money

P/E

price to earnings ratio; the latest closing price divided by the earnings per share

The amount with which an individual starts an investment is called the _____.

principal

The original amount of money you deposit in a savings account is _____.

principal

To maintain creditworthiness, individuals should _____.

protect their credit card and account numbers to prevent unauthorized use quickly report lost or stolen credit cards read the terms of the credit carefully and make informed decisions pay off their total balance each month don't spend more than their credit limit look for credit cards that have no annual fees and lower interest rates

There are differences between leasing and buying a car. When you _____, you own the car when you finish paying.

purchase a car with a car loan

Erik bought a savings bond. He could have invested in a mutual fund and earned 2 percent more. The 2 percent he could have earned is the _____.

rate of return

Select each of the factors you should consider when investing.

risk rate of return liquidity opportunity cost

What are some main differences between investing and saving?

risky : safe potentially earns more money : earns a lower amount in interest not federally insured : federally insured sometimes earns money through dividends : no dividends; earns interest necessary to sell an investment to use the money :no need to sell; withdrawals permitted

Select all of the reasons someone would purchase a savings bond.

safe easy to buy great as gifts good for the United States government

Select all the reasons to keep your money in a financial institution.

safety security convenience growth financial future cost

An example of a cost would be _____.

salaries

Your career choice, education, and skills will affect your _____.

salary

Jeff works as a computer repair technician. He has money in a savings account and he owns some stock. What types of income does he have?

salary (from working), interest (from his bank account), and dividends (profit from his stocks)

Becoming financially literate is important because it can _____.

save you money

The 1040EZ is the _____.

shortest and simplest tax return form

spreadsheet

software that contains rows and columns used to make calculations, organize information, and make comparisons

An organized way for people to buy and sell stocks and for corporations to raise money is the _____.

stock market

Select all examples of employee benefits.

stock purchase plan bonus group health plan tuition reimbursement

To balance your checkbook, you should _____.

subtract the withdrawals and add the deposits

Anne is comparing savings accounts. One account has an interest rate of 1.2 percent compounded yearly, and one account has an interest rate of 1.2 percent compounded monthly. Which account will earn more money in interest?

the account that earns 1.2 percent compounded monthly

deductible

the amount a person has to pay when making an insurance claim, with the remaining cost covered by the insurance company

A premium is _____.

the amount an individual pays for an insurance policy

debt-to-income ratio

the amount of debt compared to income; a ratio used to determine if an individual has excessive debt

A balance is _____.

the amount of money you have in an account at a certain time

previous balance

the amount owed at the end of the previous billing period

premium

the amount paid by the policyholder for insurance

net worth

the amount you have minus the amount you owe

lender

the bank or company that lends money on the condition that it will be paid back

The periodic rate is _____.

the interest rate you are charged for one payment period

payee

the person or company to which you are writing a check

Truth in Lending Disclosure

the statement that federal law requires a credit card company to provide in order to explain their terms

Amelia has her money in a CD earning 2 percent interest. How long will it take for her money to double?

thirty-six years

The purpose of a lease is _____.

to protect both the renter and the property manager

Mike accidentally wrote a check for more than the balance in his checking account. The bank transferred money from his savings account to his checking account to cover the check. This banking service is _____.

transfer

true or false: Online banking tools allow you to pay bills from your computer.

true

true or false: Overspending can keep you from achieving your goals.

true

true or false: Supply and demand affect career wages.

true

_____ is a process for making financial decisions.

PACED

Floods, product failure, change in demand, and ineffective sales are all examples of _____.

risks

When an individual starts a new business there are _____.

risks and costs

Loan origination fee

These are fees that cover the processing of a mortgage

criteria

standards for evaluating something

FICA

Federal Insurance Contributions Act, more commonly known as Social Security; a portion of wages is withheld and sent to the government trust fund and set aside for retirement benefits.

true or false: Garnishment is when finance charges are added to your credit card account when the bill is unpaid.

false

true or false: Grace period is a period of time before the credit card company starts charging late fees.

false

true or false: If you buy a product that doesn't work, you will not be able to return it

false

When selecting a savings account, you should look at the following factors except _____.

taxes paid on the interest

supply

the amount available

When prioritizing goals, how should you order them?

in order of importance

Stafford loans

Stafford Loans-These are loans with a fixed rate for college students. Stafford loans can be used to pay tuition and other eligible school expenses.

treasury bills

T-bills; a savings product sold by the US Treasury department at a discount from their face value and range in terms from a few days to six months

Who qualifies for an IRA?

individuals who earn under a certain amount per year or who do not have the opportunity to invest in a 401(k) or a 403(b).

When you finance a car, the car then becomes _____ for the loan.

collateral

A net worth statement, financial goals, and a budget are all part of a _____.

financial plan

A financially-responsible person _____.

has a budget spends less than they make saves their money pays bills on time

If a lender is not paid and the collateral that secured the loan is taken, this is called _____.

repossession

If a lender is not paid and they take the collateral that secured the loan, this is called _____.

repossession

phishing

requesting confidential information over the internet under false pretenses to fraudulently obtain credit card numbers, passwords, or other personal data

Select all of the choices that will help pay for the costs of college.

student loans grants scholarships

A loan officer will use _____ to determine if you will be approved for a loan.

the four Cs of lending

fund manager

the professional who decides where to invest money in a mutual fund

return

the profit or gain from saving or investing money

What part of the government does property tax usually support?

city government

Fees associated with buying and finalizing your loan are known as _____.

closing costs

salary

a fixed amount of money periodically paid to a person for work

How long is the loan rate for a traditional mortgage?

30 years

What does ARM stand for?

Adjustable Rate Mortgage

What is the first step in applying for financial aid?

Applying for FAFSA

Rule of 72

a formula that helps you calculate how long it will take for your savings to double in value

mean

an average

April 15 is the _____.

deadline to file your tax return

What part of the government does sales tax usually support?

state government

An example of a risk would be _____.

theft

mortgage

A loan used to buy a house

Two types of deposit accounts are _____.

checking and savings

compound interest

interest the bank gives on the interest that has been already earned

Four common investments include all of these, except _____.

junk bonds

consumer rights

laws that protect people who make purchases

The ease with which you can get your money out on an investment is known as its _____.

liquidity

The first step in creating a budget is_____.

list and total your income

In order to create a budget, you should _____.

list and total your income, list and total your expenses, and subtract your expenses from your income

grants

money awarded to a variety of students that does not need to be repaid

scholarship

money for college that you are not expected to repay; offered to students who satisfy certain criteria

liabilities

money owed

dividends

money paid to people who own stock in a company from the company's earnings

When purchasing car insurance, you will need to decide how much bodily injury limit you will need. The bodily injury limit is the _____.

most the insurance company will pay

If you received a $100 savings bond yesterday, can you use the money from the savings bond to buy an item that costs $85 today?

no

true or false: Ray invested in two different savings bonds. Did he diversify?

no

Carla watched a commercial that showed a girl just like her trying on a pair of jeans. This advertiser used the technique of _____.

ordinary people

Life insurance _____.

pays a certain sum of money to a beneficiary in case of death

.,The rate of return is the _____.

percentage that shows how much gain or loss an investment makes

An example of a cost is _____.

principal and interest on loans

The purpose of taxes is to _____.

provide police protection pay for roads and road maintenance provide judges and a court system provide air traffic controllers

To protect yourself from the risk of product failure, what strategy could you use?

purchase a warranty

true or false: A long-term goal is a desired result which may be achieved in less than one year.

False

late fee

If your payment is received after the due date, a late fee will be charged.

treasury notes

T-notes; a savings product that pays interest every six months and is issued in terms of two, three, five, and ten years

Treasury Inflation-Protected Securities

TIPS; a savings product that pays interest twice per year and provides protection against inflation

Nadia was getting harassed at work by companies to whom she owed money. What act protects her from this?

The Fair Debt Collection Practices Act

What would happen if you didn't file taxes?

The first time, the IRS would file for you and you'd owe more than you would have if you had filed yourself, plus penalties and interest.

goal

target or result which is desired

The mortgage payment includes _____:

taxes principal interest PMI homeowner's insurance

Christina was getting harassed at work by companies to which she owed money. What act protects her from this?

the Fair Debt Collection Practices Act

capacity

the ability to make payments based on amount of income and other bills

True or false: To become financially responsible, you need to accept that you are accountable for your financial future.

True

true or false: A financial institution formed by a large organization for its members is a credit union.

True

true or false: A saving and investing plan is part of a good financial plan.

True

income

the money received for work, products sold, and from other sources, such as rent or investments

property manager

the person in charge of renting an apartment or other rental property; sometimes called a landlord

taxable income

the portion of income that is subject to being taxed

advertising

the practice of calling public attention to one's product or service by paying for announcements in newspapers and magazines, over radio or television, on billboards, on the internet or other places

stock quote

the prices of a stock at a particular point during the day

what is the Expedited Funds Availability Act

Usually when you deposit a check, the bank holds the money a few days until the check clears. This act limits the amount of time a bank can hold the money.

What is important to know about yourself when making a career choice?

What are you good at, but, a little more important than that, what do you love?

What is an adjustable rate mortgage?

a mortgage that has a fixed rate for a certain amount of time and then has a variable rate that changes periodically

benficiary

a person who receives the payment from a life insurance policy

co-signer

a person who signs a loan with another individual

stock broker

a professional who buys and sells stocks and other investments for customers

inquiry

a request for a person's credit report

IRA

a retirement account that lets you save and invest money tax-free until you withdraw it when you retire

403(b)

a retirement plan available to employees of nonprofit organizations, such as schools and hospitals

401(k)

a retirement plan that some private corporations offer their employees

529 plan

a saving plan for education designed to help set aside funds to pay for future college costs

money market accounts

a savings account that offers a higher rate of interest when you make large deposits

Balloon Mortgage

a short-term loan with low interest rates; when the term is up, the entire balance of the loan is due

balloon mortgage

a short-term mortgage in which small payments are made until the completion of the term, at which time the entire balance is due

Diversification means that you invest in _____.

a variety of types of investments in order to minimize risk

Mitchell does not have a checking account, but needs to pay a bill. By what means can Mitchell pay?

transfer

true or false: A financially-responsible person reacts quickly to problems.

true

"You've been specially selected to win our grand prize. Contact us to collect it!"

scam

true or false: A financial institution always keeps all of your money in the vault.

false

true or false: A good financial plan does not include an insurance plan.

false

true or false: Financial risks are usually less than $100.

false

true or false: If the principal on one loan is $1,000 more than another loan, the total cost of the loan is $1,000 more.

false

what are some services that can help you save and invest?

financial advisement; fund manager; full-service stock broker or brokerage firm

The main types of financial institutions are all of the following, except _____: savings and loan bank financial adviser credit union

financial adviser

Put the following steps for calculating net worth in the correct order.

1. List assets 2. Total assets 3. List liabilities 4. Total liabilities 5. Subtract liabilities from assets

Sophie's credit card has an APR of 19 percent. What is the periodic rate?

1.58 percent

true or false: Bankruptcy is a process when a lender tries to obtain money from an individual's employer to pay an unpaid debt.

False

true or false: It is important to evaluate your progress toward your goal.

True

relevant

appropriate, suitable, fitting

risks

something that causes the possibility of a loss

The safest and most popular type of mortgage loan has a fixed rate and is called a _____.

traditional loan

Cynthia feels she is ready to move into her own apartment. She makes $2,000 per month. Does she make enough money to pay for the continuous costs of this apartment?

yes

Grace makes $2,200 per month. She spends $300 on credit card payments, $120 per month for a furniture purchase, and $450 on an auto loan. Does she have excessive debt?

yes

Monica graduated from high school this year and has a steady job. She feels ready to move into her own space and has $1,200 in savings. Does she have enough for a down payment to rent this apartment?

yes

Andy has a remaining balance of $845 on his credit card. His credit card company has an APR of 18 percent. How much will Andy pay in interest for one month?

$12.68

Reliable financial information includes _____: 1. information from experts in the field 2. information from recognized and reputable organizations 3. outdated data 4. information that can be verified by other sources

1. information from experts in the field 2. information from recognized and reputable organizations 4. information that can be verified by other sources

true or false: Relevant information is information you can't trust.

False

A process for making financial decisions is called _____.

PACED

What is Series HH savings bonds?

This is a U.S. Treasury savings product issued in multiples of $500 that pays interest every six months. So, to purchase an HH savings bond, you would need to pay at least $500. You can purchase HH bonds for $1,000, $1,500, $2,000, and so on. The security needs to be held for ten years to reach its full value.

Lock-in fee

This is a fee to hold a low interest rate while the lender reviews the application.

true or false: An IRA is a retirement plan that some companies offer their employees.

True

savings and loan

a financial institution that specializes in home loans

W-4 form

a form prepared by an employee for the employer to specify exemptions and determine the amount of taxes to be withheld from the employee's paycheck

VA loan

a government-backed loan for veterans

FHA loan

a government-backed loan, which makes it easier for some people to qualify

bankruptcy

a legal statement that an individual is unable to pay lenders, involving a court process that protects people while they repay debts or the court removes the debts

misconception

a misunderstanding; a mistaken thought or idea

rate of return

a percentage that shows how much gain or loss an investment makes

An example of a risk is _____.

an employee injury

An account with a financial institution used to pay taxes and insurance is called _____.

an escrow account

U.S. Department of Treasury

an executive department of the United States government whose purpose is to manage the government's money

IDA

an individual development account or a matched savings accounts into which an organization, such as a foundation, corporation, or government, agrees to add money which matches the money you deposit

It is early in the year, and Keesha would like to start saving money for next year's holiday presents. What type of account should Keesha open?

club account

What are some alternative forms of investments?

collectibles, penny stocks, variable annuities, junk bonds, hedge funds

Choosing products that do not harm the environment and gathering information about a product's quality are examples of _____.

consumer responsibilities

Spreadsheet software can be used to _____.

create a budget

Select each type of credit

credit card installment account loan service credit

A report prepared by a credit bureau which shows details of an individual's credit history is a _____.

credit report

A number that lenders look at to see if an individual is creditworthy is a _____.

credit score

A financial institution formed by a large corporation for their employees or members is a _____.

credit union

Work environment is one _____ that you could consider when making a career decision.

criteria

A lender uses a credit report to _____.

decide if the applicant is creditworthy

Rachel's paycheck stub shows an amount that was subtracted from her pay for health insurance. This is a _____.

deduction

When weighing your employment options, consider _____.

employee benefits

Arturo watched an advertisement that showed a scientist recommending a solar energy product. This advertiser is most relying on the advertising technique of _____.

having experts make recommendations

Using money to try to make more money is called _____.

investing

If you want your investment or savings account to be easily turned into cash without losing its value, you should consider the _____.

liquidity

financial aid

money used to support students with the costs of higher education

Select all of the information you need when getting a quote for car insurance.

name age gender number of accidents town you live in make and model of car approximate number of miles driven per year

According to this warranty, if the camera has had its serial number removed, would it be repaired?

no

Sam's laptop is four years old and needs a new hard drive. He got a quote that it will cost $450 to fix it. A new, similar laptop with a faster processor costs $750. Use the PACED decision process to decide what his best choice is. Show each step.

p - define the problem: Either Sam can pay more money for a computer that may last longer, or pay less money for a computer that may break sooner than a new one. a - list the alternatives: don't spend any money and have a broken computer; replace the hard drive in the old computer entirely. c - select the criteria: cost, time computer will last, e - evaluate the alternatives: he needs a computer so option one is out; he could replace the hard drive but keep an old computer, but he would still have to pay someone to do it, which would cost money. d - make a decision: Sam should buy the new laptop.

Online banking tools allow you to _____: pay bills from your computer transfer money from one account to another view checking account transactions look for bargains

pay bills from your computer transfer money from one account to another view checking account transactions

The grace period is the _____.

period of time before the credit card company starts charging interest

employee benefits

perks (extra benefits) that a company provides their employees; may include paying for health insurance or providing a retirement plan

What are the parts to determine how much of a loan is paid back per month?

principal; finance charges; loan repayment period.

Luis received his account statement. He needs to make sure the balance in his checkbook register is correct. To reconcile his checkbook, the first thing he should do is _____.

put a checkmark next to all the transactions in the register that appear on the statement

Select all the tasks associated with maintaining a checking account: record paycheck deposits in a check register. Balance the checking account. Transfer money from checking to savings. Record and subtract cash withdrawals from an ATM. Record and add interest.

record paycheck deposits in a check register. Balance the checking account. Record and subtract cash withdrawals from an ATM. Record and add interest.

opportunity costs

the difference between a chosen investment and one that is passed up

Adults pay taxes so that _____.

the government can pay for public services, such as road maintenance, public libraries, schools, and police departments

minimum payment

the least amount of money that must be paid at the end of a month

costs

the price paid to acquire, produce, or accomplish something

Julia complained to the Better Business Bureau about a business that provided poor construction. Which consumer right enabled Julia to do this?

the right to be heard

home equity

the value invested in a home; the amount owed for the home subtracted from the total value of the home

APR

the yearly interest rate a credit card company charges to borrow money

Craig graduated from college and got his first job. He rented an apartment and purchased new furniture, appliances, and a television. What risk does he face?

theft

The second step in setting goals is _____.

thinking seriously about what you want to achieve

the second step is setting goals is ____.

thinking seriously about what you want to achieve

true or false: A graphic organizer helps you visualize what is needed to reach your career goals.

true

true or false: A job that is in demand is a job with a good outlook.

true

true or false: A risk is something that causes the possibility of a loss.

true

true or false: A scam is a fraudulent scheme used to make money.

true

true or false: Assets are items you own that have value.

true

true or false: There is not one set of principles or rules about savings and investing that everyone can follow.

true

true or false: To determine if the bank's Web site is secure, look at the web site address.

true

true or false: When writing a letter of complaint to a business, you should include specific action you would like them to take.

true

true or false: Written goals should be detailed, measurable, and include a plan.

true

reliable

trustworthy, information you can trust with certainty

If you must apply for a loan, you should _____.

visit a loan officer at a financial institution and complete an application

Money received for work is/are _____.

wages

A written guarantee to fix or replace an item is called a _____.

warranty

Theresa just graduated from high school. She is making career decisions. What criteria should she consider?

work location, salary, daily tasks, work schedule, and job outlook

Select all the criteria you could use when applying the PACED decision-making process to career decisions. work schedule location the boss salary prestige

work schedule location salary

A warranty is a _____.

written guarantee that states an item will be fixed or replaced under certain condition

Mario has a remaining balance of $1,300 on his credit card. His credit card has an APR of 20 percent. How much will he pay in interest in one month?

$21.67

David's gross pay was $450, and his total deductions were $49. What is his net pay?

$401

Read the following descriptions. Decide who demonstrates good habits.: 1. Erica has a file folder with old bills and receipts. She also creates a folder on her desktop for all of her financial information. 2. Allison throws away most of her receipts, and she does not have a place to organize financial documents.

1. Erica has a file folder with old bills and receipts. She also creates a folder on her desktop for all of her financial information.

The main types of financial institutions are _____: 1. savings and loans 2. banks 3. stock firms 4. financial advisors 5. credit unions

1. savings and loans 2. banks 5. credit unions

Select sources of income: 1. wages from your job 2. a rent check from someone renting a property you own 3. interest deposited into your savings account 4. commission for a sale

1. wages from your job 2. a rent check from someone renting a property you own 3. interest deposited into your savings account 4. commission for a sale

Natalie makes $2,000 per month. She spends $100 on credit card payments and $250 on an auto loan. What is her debt-to-income ratio?

17.5 percent

Who demonstrates a bad habit: 1. Erica has a file folder with old bills and receipts. She also creates a folder on her desktop for all of her financial information. 2. Allison throws away most of her receipts and she does not have a place to organize financial documents.

2. Allison throws away most of her receipts and she does not have a place to organize financial documents.

Read the following two descriptions. Decide who has better financial habits and attitudes: 1. Lindsay doesn't feel that she will ever get her credit card paid off. After seeing her new bill, she tosses it aside so she doesn't have to think about it. 2. Hillary receives a few bills in the mail. She takes out a piece of paper and starts figuring out a plan to pay these bills.

2. Hillary receives a few bills in the mail. She takes out a piece of paper and starts figuring out a plan to pay these bills.

Ethan would like to take a trip to England to visit his grandpa. Which of the following goals is a good goal for him?: 1. I will buy a plane ticket to travel to England. 2. I will work one extra shift per week, and I will set aside $150 per paycheck to purchase a plane ticket to England. 3. I will travel after I graduate. 4. I will save $100 per paycheck.

2. I will work one extra shift per week, and I will set aside $150 per paycheck to purchase a plane ticket to England.

Read the following two descriptions. Decide who has better financial habits and attitudes.: 1. Ricardo is stuck in a job that he doesn't like, and he doesn't see other opportunities at the same company. 2. Jason reads online postings at work for other jobs. He reads about the training and experience required and decides to take a few classes at work.

2. Jason reads online postings at work for other jobs. He reads about the training and experience required and decides to take a few classes at work.

When selecting a financial institution that is the best for you, you should consider _____: 1. minimum balance 2. services offered 3. other people who bank there 4. locations of banks and ATMs 5. fees

2. services offered 4. locations of banks and ATMs 5. fees

The formula for the Rule of 72 is _____.

72 / interest rate = how long it takes your money to double in size

Jake is thinking of buying a house. What's the most important question he should ask himself?

Am I financially ready?

Andrew wants to ask his brother to help him invest money in the stock market. He scanned the paper and picked a company he had heard about. What should Andrew do?

He should become more knowledgeable about his options for savings accounts.

Perkins loans

This loan is for students with large financial needs. It has low interest rates and no fees. You borrow this money through the school, and you can borrow up to $4,000 per year. You are required to start making payments nine months after you graduate or leave school. This amount of time is called the grace period.

true or false: A formula that helps you calculate how long it will take for your savings to double is the Rule of 72.

True

true or false: Before you select a savings account, you want to think about how long you'll keep your money in the account.

True

true or false: People's income is affected by choices they have made about careers, education, and skill development.

True

bank

a business and financial institution; a safe place to keep your money

term

a set period of time

money order

an order for the payment of a certain amount of money; resembles a check and is typically used to pay a bill

The stock market is _____.

an organized way for people to buy and sell stocks

If an individual has a balance on her credit card, but would like to pay less money in the long run, she should _____.

pay as much as possible each month

profit

revenue minus costs

Ethan has set a long-term financial goal to own a coffee shop in ten years. He should break this goal into short-term goals. Which of the following goals is a good and useful short-term goal?:

1. I will earn a college degree in business from University of Vermont by the time I am twenty-two years old. 3. I will save $2,600 in one year by depositing $50 dollars per week in a savings account.

what are ways to determine that a bank's website is secure?

1. If you visit your bank's web site and log into your account, the URL address changes from "http" to "https." The extra "s" stands for "security," and lets you know that the page is secure. 2. A padlock icon may appear somewhere on the page. Newer Web browsers may also use a green background on the address bar to indicate the connection is secure. 3. You may also find a gold seal somewhere on the site that reads, "VeriSign Secure Site." VeriSign is a leading provider of Internet trust services, and its insignia is confirmation that your bank is certified as a secure domain.

Carla has been working at her job for about six months. It will soon be time to complete her first tax return. What should Carla do?: 1. Obtain the tax brochure from the IRS and read it. 2. Ask her parents about how to fill out tax forms. 3. Wait until the IRS sends a bill. 4. Set aside some time to complete the forms well before the deadline.

1. Obtain the tax brochure from the IRS and read it. 2. Ask her parents about how to fill out tax forms. 4. Set aside some time to complete the forms well before the deadline.

Select the items from this list that are examples of good financial habits. 1. creating a budget no matter what your age 2. asking advice from employees at a bank or financial advisers 3. buying stock before you have a steady income 4. keeping good records 5. saving as soon as you have a full-time job

1. creating a budget no matter what your age 2. asking advice from employees at a bank or financial advisers 4. keeping good records

Select all deductions that may be taken on your paycheck: 1. federal taxes 2. Medicare 3. Social Security 4. interest on your savings account 5. state taxes 6. amount you pay for health insurance

1. federal taxes 2. Medicare 3. Social Security 5. state taxes 6. amount you pay for health insurance

A financially responsible person _____: 1. saves their money 2. has a budget 3. sets goals 4. spends less than they make 5. pays for everything with a credit card 6. pays bills on time

1. saves their money 2. has a budget 3. sets goals 4. spends less than they make 6. pays bills on time

Select each of the reasons for becoming financially literate.: 1. saves you money 2. reduces stress 3. causes you to choose high-risk investments 4. helps you make smart decisions 5. reduces your risk of losing money 6. helps you reach your goals

1. saves you money 2. reduces stress 3. helps you make smart decisions 4. reduces your risk of losing money 5. helps you reach your goals

Who did not spend wisely?: 1. Erika looks for bargains online before she goes shopping. 2. Mia makes a list before she heads to the grocery store. 3. Erin makes a purchase online using a credit card. She knows that she can pay the entire bill when it arrives. 4. Lauren buys a cheap pair of headphones. They break, and she needs to buy a new pair.

4. Lauren buys a cheap pair of headphones. They break, and she needs to buy a new pair.

What do A, P, r and n stand for?

A is the amount of money accumulated. P is the principal. r is the interest rate (1.6%, 5%...). n is the number of years the amount is in the account.

What is Series EE savings bonds?

A type of government bond; These are safe savings products that you can use toward your education or for gifts. EE Bonds are purchased at half their face value, so the $100 bond costs only $50. EE Bonds must be held for at least one year before they can be cashed. However, it takes between ten to thirty years for the bond to reach its full value. For example, you pay $50 for a $100 bond, but you may wait twenty years for it to be worth $100.

Name five services available at banks.

ATMs; transfers; direct deposits; money exchanges; overdraft protections; online banking; money orders; debit cards; loans; automatic bill payments; traveler's checks.

What should you consider when purchasing a credit card?

Annual fee: Balance transfer fee Cash advance fee Late fee Over-the-limit fee

How do cities and towns get money to pay for places and services for the community?

Cities and towns collect property taxes.

What should be your first step if you have a complaint that you think violates your consumer rights?

Contact the seller, remain calm, and state the problem.

Gather information about the product and use the PACED decision-making process.

Cooling off Rule

what might a savings/investings plan look like?

Deposit $50 per month into a basic savings account. Take $1,000 out of savings account and put it into a CD. In two years, start contributing on a regular basis to a mutual fund. In five years, start contributing on a regular basis to a retirement plan.

List at least three questions you should ask yourself to make sure you are ready to rent.

Do you have enough money and income to pay for all the costs? Is the place you can afford safe? Do you have a good credit score? Property managers will look at this to determine if you'll make a trustworthy tenant. Is your job stable? Do you have enough money saved up to cover two to three months rent in case you lose your job? Are you ready to live on your own and take care of daily needs such as cooking, waking up on time, and shopping for necessary items?

Who qualifies for 401(k)s?

Employees of private companies.

Describe how to make an electronic payment.

Enter information about the payee, add the date to pay the bill, the amount, and from which account you'd like to pay.

What are the steps for writing a check?

Enter today's date, write the payee, write the amount in numbers, write the amount in words, and sign the front of the check.

Carrie is single and feels that she will not be approved for a loan for this reason. Which law protects Carrie?

Equal Credit Opportunity Act

Nadia could not withdraw money from her checking account, even though it had been several weeks since she deposited a check. What act protects her from this?

Expedited Funds Availability Act

Nadia had money in a savings account at a Savings and Loan, but the Savings and Loan closed. What act protects her money in the savings account?

FDIC Deposit Insurance Regulations

What part of the government does income tax usually support?

Federal government and/or state government

Select all the techniques used in advertising:

Humor is used to catch audience attention. Famous spokespeople are shown using a particular product or service. Experts, such as dentists or doctors, are show recommending certain products. Ordinary people are shown using everyday products, such as laundry detergent, in hopes that consumers will identify with them. Status is often suggested by associating product use with someone who is successful and enjoys the "finer things in life." Physical attraction is suggested by associating the use of a product with increased physical attraction or appeal. Entertainment is implied by showing others using the product while having fun. Intelligence is suggested by associating products with smart people who can't be fooled by gimmicks. Independence is suggested by associating products with people who can think and act for themselves. Guarantees, such as "lifetime guarantee" and "satisfaction guaranteed, or your money back," imply security. Scarcity is implied when the seller creates a false sense of urgency by claiming that supply or time is limited. Perceptual contrast is employed when the seller presents an undesirable option first to make the second option look far superior. Scientific or numerical claims, some of which cannot be proven, such as "Nine-out-of-ten doctors say ...," reassure the purchaser. Popular music is used so that the consumer might attach the product to something popular. Bright colors catch the attention of a viewer. Sound effects catch the attention of a viewer. Words like "new," "amazing," or "free" catch the consumer's attention.

Which of the following goals is most effective?: 1. I will purchase a house by age twenty-five. 2. I will purchase a three-bedroom house located near Cherry Park by my twenty-fifth birthday. In order to reach this goal, I will graduate from college and secure a job as a software developer.

I will purchase a three-bedroom house located near Cherry Park by my twenty-fifth birthday. In order to reach this goal, I will graduate from college and secure a job as a software developer.

Grace wants to become a manager at the bank where she is currently a teller. Which of the following goals would be appropriate for her?

I will take management courses at a local business college so that I will be promoted to bank manager in less than five years.

Carol has decided that she wants to travel when she graduates high school. Which of the following would be a helpful goal for her?

I will work one extra shift per week and set aside $150 per paycheck to purchase a plane ticket to Italy.

In one or two sentences, describe some rewards of starting your own business.

If the business is successful, you alone reap the benefits and also dictate your own work hours. You don't have to rely on others to get work done.

In three to four sentences, describe why CEOs (the chief executive officers, that is, the leaders of large companies) make very high salaries, while their administrative assistants make much less.

In order to become a CEO that will make your business continue to thrive requires a couple of things. First, it requires knowledge of supply and demand and how business is best and most efficiently conducted. Second, it needs experience. One cannot become a CEO if they have no experience in business. It is because that being a CEO has so many requirements that the pool of people who can fulfill that role is very small, and so much be paid a lot as compensation for taking such a difficult job, while being an assistant doesn't require the same amount of education or experience.

Select the differences between saving and investing.

Investing is riskier, but has the potential for a higher rate of return. Some investments earn dividends. Savings accounts earn interest.

What is Form 1040EZ?

It is for people under age 65 with no dependents and no itemized deductions who make no more than $100,000.

Amber asked her dad to co-sign her loan. If she makes a late payment, what may happen?

It may be reported on her dad's credit report.

What is Form 1040A?

Only a little more difficult to complete than the 1040EZ, you use this if you do have dependents. You may use this form if you make less than 100,000 and you don't itemize deductions.

What does PMI stand for?

Private Mortgage Insurance

Select all of the strategies for avoiding credit problems.

Set goals. Use the debt-to-income ratio to determine if you are ready for a big purchase. Run a credit report annually. Create a budget and stick to it. Get rid of unnecessary expenses. Pay bills on time

Ann is in the middle of completing her first 1040EZ tax form. She has some questions about an instruction on the form. What should she do?

She should probably consult the IRS website, but asking someone who has been doing taxes for many years (such as her parents) wouldn't be a terrible idea either.

Identify tips that help you save.

Spend wisely. If you receive cash as a gift, save at least part of it. Pay your bills on time to avoid late fees and finance charges. Use direct deposit or set up your account to automatically transfer money directly into savings. Save any extra money, such as a raise or bonus, from your employer. When you get a tax refund, save it. Save the change you have in your pocket at the end of the day and deposit it regularly into a bank account. If your employer offers a retirement plan, join it. If you pay off a loan, continue to make the monthly payments to yourself. Avoid debt.

what are some disadvantages to online banking?

Start-up time - To register for your bank's online program, you'll probably have to provide ID and sign a form at a bank branch. Variable online services, according to the given bank - You'll need to spend some time reading or watching the online training for each bank you deal with. Changes to the web site - Periodically banks upgrade web sites, which may interrupt service. The issue of security - For some people, it's hard to trust that online banking is safe. Read on to see how you can tell if a given web site is secure.

Michael bought a new car. The sticker price was $6,100. He decided not to buy a warranty or any upgrades to the car. However, he ended up paying much more. Why?

Taxes, insurance,

what is the Electronic Fund Transfer Act

The Electronic Fund Transfer Act establishes rights of consumers who use electronic fund transfer services such as ATMs, transactions over the telephone and on the internet, and debit cards. This act requires financial institutions to limit how much a consumer is responsible if an ATM or debit card is lost or stolen. It also protects them if there is an error in a transaction.

What is the Truth in Savings Act

The Truth in Savings Act enables consumers to make informed decisions before opening an account. Because of this law, banks must provide account information to consumers when they ask for it. The information needs to be clear and in writing so consumers can use it to shop for the best account. The bank is required to include interest rate information, balance requirements, and fee information.

Select all of the benefits to buying a home:

The value of the home generally increases over time. The equity in your home increases. You can take out a home equity loan. Once the mortgage is paid in full you own the home. You can make improvements to the place.

Equal Credit Opportunity Act

This act promotes the availability of credit to all creditworthy applicants. Lenders are not allowed to make a decision to approve a loan based on factors such as race, color, religion, national origin, sex, marital status, age, or disability. This act also restricts the lender from requesting this information during the loan application process.

The Fair Credit Reporting Act (FCRA)

This act requires a lender to notify you if you are denied a loan or credit because of information in your credit report.

The Fair Credit Billing Act (FCBA)

This act requires creditors to promptly fix billing mistakes and promptly process payments. If you think there is an error on your bill, you should notify your creditor in writing within sixty days of receipt of your incorrect bill.

true or false: When making financial decisions, it is important that you critically evaluate the source.

True

Select all the laws and regulations that protect your bank account.

Truth in Savings Act Electronic Fund Transfer Act Expedited Funds Availability Act FDIC Deposit Insurance Regulations

What can you do to figure out how much you can afford when buying a car?

When comparing car loans, you should look at the APR. A car loan can be used to purchase a new or used car. The car itself is the collateral for the loan, which means if you don't pay off the loan, the bank can repossess it. New car loans typically have a loan period of three to seven years, and used car loans have a loan period of two to five years. Remember, the shorter the loan period, the less you will pay for the total cost of the loan. The title is a certificate indicating who owns the car. If you pay cash for the car, you'll have possession of the title and your name will be on it. However, if you secure a loan to pay for the car, the title will indicate who the lender is. You can obtain a car loan at a bank, credit union, savings and loan, or at a car dealership. Run your credit report and dispute any errors a few months before shopping for a car, so that there are no surprises during the approval process. When selecting a car loan, don't make a decision based solely on the monthly payment. Think about the total cost of the loan. Remember, the total amount you'll pay depends on the price of the car, the APR, and the loan period.

One month ago, Kyle made a goal to save $800 for a new video camera. The deadline is in seven months. He now has $110 saved. Evaluate his progress toward reaching his goal. Is Kyle on track to reach his goal?

Yes (It takes 8 months to save $800, $100 per month, a month has passed and he has $110).

How do mutual funds work?

You put your money in with other people's in an account and a funds manager will decide where to invest it.

filing status

a category on tax forms that is closely tied to marital status; categories are: single, married, head of household, and widower

lien

a claim to take and hold property until a debt is paid

mutual funds

a collection of money from a group of investors that is used to buy different investments, like stocks, bonds, and real estate, managed by professionals

Jordan visited a sporting goods shop. The salesperson knew that he had a fear of bugs and used this fear to sell him extra camping gear. This is an example of _____.

a deceptive sales technique

Julian went to a store and found that the store did not have the sale item she wanted. A salesperson showed her a similar, but more expensive, item. This is an example of _____.

a deceptive sales technique

short-term goal

a desired result which may be attained in less than one year

long-term goal

a desired result which may be attained in more than one year

commission

a fee paid to an employee for their sale or services, which fee is usually based on a percentage of the sale price

unsecured loans

a loan in which the individual does not offer collateral; sometimes called personal or signature loans

Mitchell doesn't have a checking account, but needs to pay a bill. What can Mitchell pay with?

a money order

ARM

a mortgage that has a fixed rate for a certain amount of time and then has a variable rate that changes periodically

grace period

a period of time before the credit card company starts charging interest

shareholder

a person who owns shares of a company's stock

entrepreneur

a person who takes a risk to create a new product or to develop a better way to operate a business

occupation

a person's usual work or business; a way of earning a living

collateral

a piece of property that a person promises to give to the lender if a loan is not paid

account verification

a process where banks check your credit history to make sure you will be a responsible account holder

financial institution

a public or private organization that collects and invests money and offers financial services

A stop-payment request is _____.

a request by an account holder for the bank to not pay a specific payment

stop payment

a request by an account holder to the bank not to pay a specific payment

savings bond

a savings product or certificate issued by the U.S. government with values ranging from $50 to $10,000

The difference between a secured loan and an unsecured loan is _____.

a secured loan requires collateral and an unsecured loan does not

warranty

a written guarantee given to the purchaser, usually specifying that the manufacturer will make any repairs or replace defective parts free of charge for a certain period of time

Which of these factors should you consider when deciding whether to lease a car or buy one with a car loan?

additional costs for damages to the car monthly payments mileage restrictions

No yard maintenance and the freedom to move easily are both _____.

advantages to renting

To get money from an ATM, you need _____.

an ATM card and a pin

club account

an account used to save money for a special reason, such as a holiday, a vacation, or college

insurance policy

an agreement to cover or reimburse an individual for a loss that occurs

An insurance policy is _____.

an agreement to reimburse an individual for a loss that occurs

deductions

an amount that is subtracted

co-payment

an amount the insured person pays to cover a portion of a doctor bill or cost for prescription

A withholding allowance is _____.

an amount you enter on a W-4 form

An alert is _____.

an email you receive when something specific happens in your account

stockholder

an individual who owns one or more shares of stock in a joint stock company

literacy

an individual's knowledge of a certain area or field

variable rate

an interest rate that may change during the repayment period

fixed rate

an interest rate that remains the same throughout the entire loan repayment period

career

an occupation or profession that usually requires special training

Better Business Bureau

an organization whose purpose is to receive and investigate customer complaints of dishonest business practices and provide complaints and reports from investigations to the public

consumer

any individual who uses or has paid for goods or services

financial

anything that has to do with money and investments

To become an architect, you need six years of education. To become a physical therapist, you need two years of education. Which career do you think pays a higher salary?

architect

Tips for spending wisely include the following, except for _____: using credit cards infrequently tracking your spending borrowing money from your friends avoiding impulse purchases

borrowing money from your friends

What are the 4 C's of lending?

capacity, capital, character, and collateral

variable interest rates

different interest rates paid for different size balances, with higher balances earning higher rates

Jordan wants to know how long it will take for the money she deposited to double. She has an interest rate of 4 percent. Calculate how long it will take her money to double.

eighteen years

What are the continuing costs for an apartment?

electricity bill rent water bill renter's insurance pet fees

An example of an ongoing cost is _____.

employee salaries

When selecting stock, some financial experts recommend to _____.

examine the day's range, earnings per share, and P/E ratio

Bankruptcy is a possible consequence for having _____.

excessive debt

true or false: A real estate investment is as safe as putting your money in a savings account.

false

true or false: A stock quote is advice from a broker about what stock to invest in.

false

true or false: Compound interest is the interest that is divided into different accounts.

false

true or false: Everyone should try to be an NFL quarterback because they earn so much money.

false

true or false: Interest you receive from a bank is not considered income.

false

true or false: It is not a consumer's responsibility to report fraudulent activity.

false

true or false: Liabilities are items you own that have value.

false

true or false: Making a career decision is simple, and it's not necessary to use a process.

false

true or false: Salary is the most important factor when choosing a career path.

false

true or false: Wages from an employer are the only source of income.

false

true or false: When the revenue for a business is less than its costs, it is making a profit.

false

true or false: You should not use the PACED decision-making process to make career choices. It should mostly be used for financial decisions.

false

true or false: written goals should be simple and short.

false

what are some services that can be used to learn and understand more about investing?

financial advisers; articles in financial magazines and the financial section of the newspaper; full-service stock broker or brokerage firm; investment books at the library or book store; millions of online articles about various financial topics; (Note: make sure they are written by a reliable source.) suggestions from analysts who are accessible online; web sites that provide stock quotes and tables; customer service representatives at your bank.

A stock table is used to _____.

give you basic information and price history for stocks

creditworthy

having an acceptable credit rating; considered responsible to borrow money

How does a lender use a credit report?

he uses it to conduct research that will help him determine whether or not a client is creditworthy

The purpose of insurance is to _____.

help protect you from financial loss

Spending wisely _____.

helps you have control over your finances

Select all of the reasons an individual would save his money in a CD.

high interest rates safe no fees

Select all the reasons an individual would save his or her money in a CD.

high interest rates safe no fees

The type of loan that allows people to borrow money from the amount invested in their house is a _____.

home equity loan

what are the different types of insurance?

homeowners, disability, car insurance, health insurance, life insurance,

Adam's goal is to have $4,000 saved by the end of the year. However, he spent too much at the mall this week and will not be able to put $150 in his savings account. This is an example of _____.

how his decision affected his goal

what things should you think about before you set up a savings account?

how long you'll be keeping your money in the account; how often you'll want to withdraw money; how much money you'll keep in the account.

capital gains

income earned by the sale of assets, such as stocks or property, which income is the difference between the price paid and the selling price

liability coverage

insurance that covers injury or loss to other people, for which injury or loss you are responsible

Liability coverage is _____.

insurance that covers injury or loss to other people, for which you are responsible

property coverage

insurance that covers the contents of your home, such as furniture, television, bikes, appliances, and clothing

Select each source of income. 1. a gift check from your great aunt 2. a check from your roommate for rent 3. interest deposited into your checking account 4. a few dollars your friend loaned you 5. the tip your client left you

interest deposited into your checking account interest deposited into your checking account

When making a career decision, you should reflect on your _____.

interests skills values personaity traits

The purpose of a W-4 form is to _____.

let your employer know how much to take out of your paycheck for taxes

select all the parts of a good financial plan: net worth statement savings account financial goals savings and investing plan insurance plan checkbook register budget

net worth statement financial goals savings and investing plan insurance plan budget

Alex received two job offers. He is not sure whether he should take a job at the movie theater that is close to his house and pays $8.50 per hour, or if he should take the job at a grocery store that pays $9.00 per hour but is a thirty-minute drive. Use the PACED decision process to decide what Alex should do. Show each step.

p - define the problem: either he can take the job that it closer that pays less, or the job farther away that pays more money. a - list the alternatives: can take neither job c - select the criteria: time to get there, total payment after gas reductions e - evaluate the alternatives: he wants a job, d - make a decision: well, if he drives 30 minutes to get to the grocery store, let's just say that's about $8 worth of gas to get there, and $8 to get back. $16 worth of gas to be paid 50 cents more. Not worth it, Alex should take theg job at the theater.

If you want more information about services available at a bank, you can use the following resources: printed material customer service representative bank teller loan officer bank web sites

printed material customer service representative bank teller loan officer bank web sites

Lori would like to find the cheapest car insurance. She conducts an Internet search. She clicks on one of the results, and it is a form used to generate a quote for car insurance. This information is _____.

relevant

Emily, a college student, reads an article in Money magazine. The author has a degree in finance. The article is about getting a home equity loan. This information is _____.

reliable but irrelevant

what are some reasons to keep your money in a bank or other institution?

safety convenience growth cost security financial future

A net worth statement, insurance plan, and a budget are all part of a _____.

saving and investing plan

Which of the following is the least risky?

savings account

Regal Financial Institution specializes in home loans. What type of financial institution is it?

savings and loan

Carl would like to save money for his first year at college and track his progress. What online tool should Carl use?

savings plan

List some financial risks

scams identity theft investment loss job loss cash loss accident or injury theft product failure expensive repairs illness disability natural disaster

Simon just completed and double-checked his 1040EZ tax return form. Now he should _____.

send it to the IRS before April 15th

When writing a check, you complete all of these steps except for _____.

signing the back of the check

Use the Rule of 72 to solve. Manny has his money in a savings account earning 4.5% interest. How long it will take his money to double?

sixteen years

dependent

someone who depends on another individual for food, shelter, and other necessities, usually a child

Tips, bonuses, and capital gains are all _____.

sources of income

Randy would like to set up a budget for a vacation he is taking next year. Which money management tool should Randy use?

spreadsheet

what are some common ways to invest?

stocks; mutual funds; retirement investments; real estate.

Sara notices that she double paid her gas bill. What online service should she use?

stop payment

All of the following are services that are available at banks except _____: ATM online banking traveler's checks money orders tax accounts automatic bill payment debit card overdraft protection

tax accounts

Select all of the advantages of a retirement account.

tax free until you withdraw money when you retire money is taken out of your paycheck before you pay taxes on it deposits may be matched by the company you work for

Sales, property, and income are three types of _____.

taxes

interest thresholds

the minimum balances before the bank begins paying interest

traditional mortgage

the most popular mortgage that has a fixed interest rate and a loan period of thirty years

If you have questions about taxes, where can you go to get answers?

the official IRS website

The difference between a chosen investment and one that is passed up is _____.

the opportunity cost

principal

the original amount of money invested or deposited into a savings account

Select all rights of consumers.

the right to be safe the right to receive compensation the right to choose freely the right to be heard the right to be informed the right to education the right to service

Jayden was feeling pressured into buying a service plan for his new car. What right should Jayden exercise?

the right to service

repossession

the seizing of the collateral or item that secured the loan when the debt has not been paid

When an individual makes minimum payments on a credit card instead of paying as much as possible, _____.

the time it takes to pay off the credit card increases and the total cost increases

loan repayment period

the time it will take to repay the loan

What is the purpose of travel insurance?

to cover the cost of travel expenses in case you are unable to travel

Select all of the reasons it is important to save.

to reach your goals to help manage your money to be prepared in case of emergency to be ready for an unforeseen expense to improve your standard of living

Tips for spending wisely include _____: tracking your spending avoiding impulse purchases using credit cards infrequently borrowing money from your friends looking for bargains avoiding buying gifts

tracking your spending avoiding impulse purchases using credit cards infrequently looking for bargains

true or false: A goal is a result that is desired.

true

true or false: A good financial plan includes an insurance plan.

true

true or false: A small-business loan is used to pay for the costs associated with starting your own company.

true

true or false: A student loan is financial aid, but the money will need to be paid back once you leave college.

true

true or false: An individual's irresponsibility may affect the community.

true

true or false: Decisions and goals are connected.

true

true or false: FICO is a credit score.

true

true or false: Garnishment is when a lender tries to obtain money from an individual's employer to pay an unpaid debt.

true

true or false: Investing in collectibles is very risky.

true

true or false: It is important to use information that is both reliable and relevant when making financial decisions.

true

true or false: One reason to create a budget is to know what you can and can't afford.

true

true or false: The rate of return is the money that is returned to you when you sell an investment.

true

true or false: There are five steps in the PACED decision-making process.

true

true or false: You should look at the APR when comparing car loans.

true

true or false: You should review your goals about once a month.

true

Shannon wants to find out about paying taxes this year. She visits www.mikestaxadvice.com. This information is _____.

unreliable

You pick up a brochure at the grocery store. You cannot find any information about the people who created it. This information is _____.

unreliable

Serena would like to calculate the total cost of a car loan. She should _____.

use an online calculator or the formula: P(1+R/12)N

Grace would like to open a checking account. She needs to decide which bank is better for her. Grace should _____.

use the PACED decision-making process to help her decide

investing

using money in order to try to make more money

Madison has an account that pays different interest rates depending how much she has in her account. This type of interest rate is called a _____.

variable interest rate

Samantha has a loan with an interest rate of 6.67 percent now, but the rate could increase 2 percent next year. What lending term best describes this loan?

variable rate loan

what are the things that one can do through online banking?

view account balances order checks transfer money issue stop payment track recent account activity apply for loans pay bills gain information obtain a copy of a processed check

Rick works off commission. He earns 10 percent of all manufacturing equipment he sells. If he made a sale of $9,000, how much was his commission?

$900

annual percentage yield

(APY); the amount of interest you will earn in one year from a savings account

If Sam invested $3,000 and he earned $300 over six months, the principal is _____.

$3,000

Select the items from this list that are examples of misconceptions.: 1. A high school student is too young to have a budget. 2. A bank is not a safe place to keep your money. 3. Buy stock before you have a steady income. 4. After high school, there is no need to become more educated. 5. Save your money as soon as you have a full-time job.

1. A high school student is too young to have a budget. 2. A bank is not a safe place to keep your money. 3. Buy stock before you have a steady income. 4. After high school, there is no need to become more educated. 5. Save your money as soon as you have a full-time job.

Select all of the guidelines you should follow when writing your goals: 1. Include a plan. 2. Make your goals measurable. 3. Make your goals long. 4. Break down long-term goals into short-term goals. 5. Memorize your goals. 6. Use detail.

1. Include a plan. 2. Make your goals measurable. 4. Break down long-term goals into short-term goals. 6. Use detail.

List some reasons for becoming financially literate.

1. Making any kind of business deal requires financial literacy. 2. Paying off bills and loans require a certain degree of financial literacy. 3. Setting up a budget requires some forethought as well as a certain degree of financial literacy. 4. Financial literacy is required to succesfully be an adult. 5. 401K and other retirement funds. 6. Applying for a job and understanding why you don't receive all of the money that you earned.

Which of the following is an example of financial responsibility? 1. borrowing from your brother to make a car payment 2. having medical insurance 3. spending money before you have earned it 4. making impulse buys at the grocery store

2. having medical insurance

Owen makes $3,000 per month. He spends $300 on credit card payments and $350 on an auto loan. What is his debt-to-income ratio?

22 percent

Paul would like to spend $700 on a vacation. He will sell some of his stock to pay for the vacation. If the stock is worth $32 per share, how many shares will Paul need to sell?

22 shares

Carrie has the following assets and liabilities. What is her net worth? Assets car - $3,500 savings - $1,000 cash - $80 earnings - $120 Liabilities car loan - $3,000 credit card - $500

3,500+1,000+80+120=4,700 3,000+500=3,500 4,700-3,500=1,200 Her net worth is $1,200

Lauren is starting her own business-a coffee shop. Select all of her risks. 1. location 2. rent 3. an employee injury 4. theft 5. fire

3. an employee injury 4. theft 5. fire

Which of the following is an example of financial irresponsibility? 1. organizing financial documents 2. paying car payments on time 3. spending your entire paycheck 4. finding a new job before quitting your current job

3. spending your entire paycheck

What time period is this warranty for? "This warranty is given by XYZ motors. The Zoom car is guaranteed to be free of defects for 30,000 miles or three years, whichever is reached first."

30,000 miles or three years

What is the formula for calculating interest?

A = P(1 + r)n

Select each of the factors you should consider when shopping for a mortgage: APR interest rate cost of homeowner's insurance loan period fixed or variable rate property taxes

APR interest rate loan period fixed or variable rate

The amount of interest you will earn in one year from a savings account is the _____.

APY

How does advertising influence people's purchases?

Advertising is meant to make people feel as though they are incomplete or unhappy without a certain product, therefore persuading them to buy it.

Name at least four things that smart shoppers do.

Always think before you buy. Never buy something that you wouldn't normally buy only to take advantage of a sale. If something sounds too good to be true, it probably is. Be informed on return policies, refunds, and cancellation periods.

Ashley went to the mall and bought a new pair of jeans that caught her eye. This caused her to go over her credit card limit and now she owes a fee. What tip could have helped Ashley?

Avoid impulse purchases.

What should you do if you buy a faulty product?

Contact the seller, remain calm, and state the problem and exactly what you want done about the problem. Make sure you keep receipts and write down information, such as names of employees that you speak with and any facts that they state. The problem will probably be taken care of at this step. If the problem is not resolved, ask to speak to a manager. If the problem is still not resolved, send a letter or e-mail to the company's headquarters. If the problem still isn't resolved, contact your local consumer protection agency or Better Business Bureau. If you still do not have the problem resolved and the purchase was large, you may need to file a claim with small claims court or hire an attorney.

Select all the banking tasks that can be done online: Create a spending report. Order new checks. Set up an alert when your account goes under $50. Transfer money from your savings to your checking. Request a stop payment. View up-to-date account statements.

Create a spending report. Order new checks. Transfer money from your savings to your checking. Request a stop payment. View up-to-date account statements.

Jamal tried to apply for a mortgage. However, he was turned down for the loan because the loan officer noticed that he had made late payments to his credit card and he had not made payments on a loan. What questions should he have asked himself before deciding to buy a home?

Do you have a good credit report and credit score?

Anthony's debit card was stolen and someone purchased over $1,000 worth of items on it. Which law or regulation protects Anthony from having to pay for all of it?

Electronic Fund Transfer Act

Who qualifies for 403(b)s?

Employees of public establishments, like schools and hospitals.

Thomas was thinking about the car he wants to buy in a few years. He doesn't know what he should do now so that he can buy the car. What should Thomas do?

He should become more knowledgeable about smart ways to save and about car loans.

Edmund would like to buy stock. What should he do?

He should choose a broker, open an account, deposit money, and communicate with the broker about what stock he wants to buy.

what kind of strategy could someone use to invest?

Keep money in a savings account or checking account. Invest in low-risk investments, such as savings bonds or CDs. Commit to invest a set amount every pay period, usually in stocks, mutual funds, or retirement investments. Make strategic investments in a variety of different types of investments. Diversify to balance out losses and gains in different investment types. Invest in more complex and risky investments, such as penny stocks, junk bonds, or collectibles. Some people never do invest in this type to avoid the high risks

Explain how your credit score can affect how much you pay for a loan.

Loan agencies want to know if you are going to pay your loans on time, so, as a kind of way try to get you to pay on time, they'll charge you more interest, so that you will pay on time, lowering your credit score and you're interest rates.

Allen needed to buy new soccer shoes. He stopped by the closest store and bought a pair for $98. Later, he saw an advertisement selling the same shoes for $82. What tip could have helped Allen?

Look for bargains.

In one to two sentences, list some deductions you may see on your paycheck stub.

One may see deductions on their paycheck stub courtesy of things such as taxes (such as Medicare, social security and income taxes), costs for insurance (such as health or disability insurance), and/or money that you set aside for retirement.

what are some good reasons to start a 529 savings plan?

One obvious reason is to earn interest in order to pay for college tuition and other expenses. In addition, you do not need to pay taxes on the interest you earn from a 529 plan. Also, the amount you deposit is up to you. Everyone is eligible to start saving in a 529 plan.

Select each of the tools and services available with a savings account.

Online statements allow you to view your balance and transactions online. ATMs allow you to withdraw money. Online savings plans help you set goals and track your progress. Transfers allow you to move money to other accounts. Direct deposit makes it easier to add money to your account. Automatic transfers allow you to regularly move a certain amount of money from your checking account to your savings account.

what are some uses of spreadsheets in relation to finances?

Organize data you need in order to prepare taxes. Calculate the amount of your mortgage payments or car payments. Create specific budgets for special things like vacations or a wedding. Print reports. Generate graphs. Compare prices. List your assets. Organize account and credit card information. Calculate the cost of your spending habits. Calculate your net pay. Predict how much you'll save in a certain amount of time.

Taylor wants to create a budget to track her expenses and identify ways she can reduce spending. What tools could she use?

Quicken spreadsheets Mint BudgetTracker

Kevin wants to purchase a new snowboard for winter. It costs $300. It is now September. He gets paid every two weeks. After he pays his bills he has about $100 left over. Write a goal for him.

Set aside $80 from every paycheck (every two weeks) and put it into savings in order to buy the snowboard in November.

Carl has a checking account. He'd like to find out as soon as his refund check from the IRS is deposited in his account. What should Carl do?

Set up an alert.

Carl has a checking account. He'd like to know right away when his balance gets lower than $50. What should Carl do?

Set up an alert.

Jen heard that the bank where she kept her money was going to close for good. Jen said she wasn't worried. Select the most likely reason that Jen wasn't worried.

She knew that her money was insured by the FDIC.

Tina wants to start saving for college. She heard about CDs and mutual funds, but doesn't know which is best for her. What should Tina do?

She should become more knowledgeable by talking with a financial adviser or by taking a class.

What is a Series I savings bonds?

These bonds may be purchased at face value. In other words, a $50 bond will cost $50. These bonds earn two types of interest: normal interest, like interest you earn on a savings account, and interest based on inflation. The interest based on inflation accounts for the general increase in the prices people pay for goods and services. So, if the government calculates inflation to be 1 percent, then the Series I savings bond will also earn 1 percent. Series I bonds must be held for one year before they can be cashed.

The Fair Debt Collection Practices Act (FDCPA)-

This act helps eliminate abusive debt collection practices. Under this law, debt collectors can't contact you at work if you have told them not to call you there. They also may not use threats of violence or other criminal means to harm you or your property, call you with the intent to annoy, abuse, or harass you, call you without identifying themselves, or use deceptive or misleading methods to collect debt.

Credit report fees

This is the fee paid to cover the cost of obtaining a credit report.

cash advance fee

When you get cash using your credit card at an ATM or with a bank teller, it is called a cash advance. You are usually charged a transaction fee for this. In addition, a cash advance is also charged higher interest rates than regular purchases, and the interest could begin accruing immediately.

Julie's account balance in her checkbook register is $35.60. She receives a bank statement and the balance is $5.60. She notices that the deposit of $30 she made at the ATM today does not appear on the statement. Is the balance in her checkbook register correct?

Yes

deposit account

a bank account that lets you add money to the account

responsible

accountable, reliable, dependable

Richard bought stock for $200 and sold it for $300. The $100 he earned is an example of _____.

capital gains

Susan bought some land. She sold it for $3,000 more than she paid for it. The $3,000 is an example of _____.

capital gains

Allison sells pharmaceuticals. She earns twelve percent of every sale. This is a _____.

commission

When a company makes earnings or a profit, and they share this profit with the stockholders, it's called _____.

dividends

A group health plan that saves you money on health insurance is an example of a/an _____.

employee benefit

Manuel has a remaining balance of $563 on his credit card. His credit card company has an APR of 15 percent. How much will Manuel pay in interest for one month?

$7.04

Nicholas makes $2,000 per month. He spends $300 on credit card payments and $350 on an auto loan. What is his debt-to-income ratio?

32.5 percent

In a few sentences, explain how a credit score affects creditworthiness and the cost of credit.

A credit report is basically like a report card of your credit history. It lists things like past and current employers, income, credit history, etc., and information from the credit report is used to curate a credit score. A low credit score results in higher interest rates on loans, while a high credit results in lower interest rates

What is the most important factor to consider if an individual expects to carry a balance on his credit card from time to time?

APR

What are the main three credit unions?

Equifax, Experian, and TransUnion

true or false: If an individual pays the minimum payment each month, she will quickly pay off her credit card.

False

Jillian has a low credit score, and she will not be able to pay the minimum balance on her credit card bill next month. What should Jillian do?

Find credit counseling services.

over the limit fee

If your balance increases to an amount that is more than your credit limit, an over-the-limit fee is applied.

Collin has a credit card bill of $3,000. He makes only the minimum payment and is always close to the limit on his credit card. Is Collin using credit responsibly?

No

How often should you request a new credit report?

Once a year

In one or two sentences, describe how a person can calculate his monthly payment for a loan.

Well, the monthly payment equals (rP)/(1-(1+r)^-n), or, the total of the principal and the monthly interest rate (APR) all divided by (1-(1+monthly interest rate) to the power of negative loan period in months

secured loan

a loan in which the individual offers collateral; if the loan is not paid back as agreed, the individual gives up the collateral to the lender

installment loan

a loan that is repaid in equal monthly payments for a specific period of time

credit score

a number that lenders look at to see if an individual is creditworthy; also called a FICO score

foreclosure

a process in which a lender tries to regain property because the borrower has not made payments

garnishment

a process when a lender tries to obtain money from an individual's employer to pay an unpaid debt

credit report

a report prepared by a credit bureau that shows details of an individual's credit history; used by a lender to determine whether an individual is creditworthy

An installment loan _____.

has equal payments each month

character

how responsible you have been in the past with credit; information from your credit report

subprime lending

loans with very high interest rates

Name at least three consequences of excessive debt.

low credit score, subprime lending, foreclosure, garnishment, judgment, lien, repossession.

Anthony received his first credit card bill. Since he wants to use credit responsibly, he should _____.

pay as much as possible and send the payment on time

capital

your net worth; the value of the items you own and the cash you have available