Financial Literacy

A record of the jobs you have had and how long you worked at each is your ________________ .

work history

Compute the gross pay Regular hours worked: 28 Regular pay rate: $8.00/hour

$224

Carmen earns $625 per month in net income. She shares living expenses with a roommate. They split the shared expenses in half. Her expenses are: food, $175/month; rent, $150/month; utilities, $35/month; and transportation, $20/month. How much does Carmen have left each month to save and spend on other items, based on her monthly net income?

$245

Compute the gross pay Regular Hours Worked: 40 Overtime Hours Worked: 4 Regular Rate of Pay: $7.50/hour

$345

Compute the gross pay Annual Salary: $48,000 How much is the monthly salary?

$4000

Chapter ______ small business bankruptcy is for small businesses owned and operated by individuals like a sole proprietorship. This is not an option for businesses operated through partnerships, limited liability companies, or corporations

13

Chapter ______ personal bankruptcy wipes out most debts in exchange for giving up most assets.

7

What is opportunity cost?

A benefit a person could have received, but gave up, to take another course of action. An alternative given up when a decision is made. This cost is therefore more relevant for two mutually exclusive events, whereby choosing one event, a person cannot choose the other.

What is a wage garnishment?

A court issues an order requiring your employer to withhold a certain amount of your paycheck and send it directly to the person or institution to whom you owe money, until your debt is paid off.

What is a 401(k) plan?

A portion of salary deducted from gross pay and placed in a special account.

How can you protect your credit cards when shopping online?

All of the above

Which of the following is an employee benefit that an employer may provide?

All of the above

Which is NOT one of the three most common ways an employer may handle paying his/her employees?

Cash

From the assets listed below, put them in order from most liquid to least liquid in reference to "market liquidity".

Cash, Stock, Collectibles, Real Estate

Which of the following types of income is not taxable for the recipient?

Child support

Which of the following is NOT usually an employee benefit that an employer may provide the employee?

Clothes

Which of the following terms refers to property or possessions used as security for payment of a debt?

Collateral

What is the definition of market liquidity?

Degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price

What is the purpose of the Form W-4?

Determines how much of an employee's paycheck will be withheld for federal income taxes

Money you have to spend after taxes and other deductions is called ____.

Disposable income

Salary, location and environment, and benefits are factors to consider when:

Evaluating a job offer

Interest rate risk is the likelihood that a borrower will default on a loan or lease, causing the bank to lose any potential interest earned as well as the principal that was loaned to the borrower.

False

Your take home pay is less than the total amount you earn from your job. Which of the following best describes what is taken out of your total pay:

Federal Income tax, Social Security, and Medicare contributions

What is the easiest income tax form to use?

Form 1040EZ

The statement showing money withheld by an employer for income and social security taxes is ____.

Form W-2

Josh is considering taking a job with a company that is offering gym memberships, flexible hours, repayment of education loans, merchandise discounts, and childcare. These components of the job offer are called:

Fringe benefits

What is the simple interest formula?

I = P * R * T

Which one of the following could NOT be called income?

Interest paid on a loan

What is the type of bankruptcy in which creditors ask the court to declare a debtor bankrupt?

Involuntary

If being fired is the reason for changing job, an appropriate response on a job application concerning this situation would be:

Involuntary separation

What is the core business of a pawn store?

Making collateral loans (guitar, Harley Davidson)

What is income?

Money earned

Take-home pay is also called

Net Income

When all deductions are taken out of gross pay, the amount left is known as ____.

Net pay

The amount borrowed is called ____.

Principal

Property taxes are which kind of taxes?

Proportional taxes

A checking account offered by a credit union is the ____.

Share account

Which of the below is the true definition of the "Rule of 72"?

The "Rule of 72" is a simplified way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to duplicate itself. Interest rate = 10 72/10 = 7.2 years.

What is Human Capital?

The collective skills, knowledge, and other intangible assets of individuals that can be used to create economic value for the individual

What is the idea behind predatory lending?

To impose unfair or abusive loan terms on a borrower. To convince a borrower to accept unfair terms through deceptive, coercive, exploitative or unscrupulous actions for a loan that a borrower can't afford.

Activities that generate portfolio income:

Trading paper assets (ex: stocks, bonds), Buying and selling real estate, Buying and selling other assets (ex: antique cars)

The amount of credit above what you already owe, and which could be used to charge purchases, is called ____.

Unused credit

An employer must mail to you a _______ showing your total wages and withholdings while you were employed.

W-2

What form shows wages, salaries and tips for a given year?

W-2 Form

Activities that generate earned income:

Working a job, Owning a small business, Consulting, Gambling, Any other activity that pays based on time/effort spent

If you have an error on your bill from a credit card company, you should do which of the following?

Write a letter within 60 days explaining the error

To intentionally fail to pay taxes owed is to commit a felony offense called __________________.

evasion

The amount borrowed, or the unpaid portion of the amount borrowed, on a loan is called _________.

principal

A written statement from someone who knows you and can report about your character and abilities is a ________________ .

reference letter

Your permanent work identification number, called your ______________, is the record of your earnings and withholdings used to determine retirement benefits.

social security number

An endorsement signing a check over to a third person is called ___________________.

special

Compute the gross pay Total Hours Worked: 48 Regular Rate of Pay: $9.75/hour

$507

What are the items you can make money from the royalty payments?

-copyright -mechanical -art work -patent -trade mark

Match the Annual salary: $18,000

1. Compute monthly salary: 2. Compute weekly salary: 3. Compute bi-weekly salary: $1500 __1__ $692.31 __3__ $346.15 __2__

Chapter ______ small business bankruptcy is expensive, risky, time-consuming, and complex

11

Net worth is defined as ____.

Assets minus liabilities

Which type of obligation remains after bankruptcy?

Government Subsidized Student loans

Activities that generate passive income

Rental Income from Real Estate, Business Income, Creating and Selling Intellectual Property, Affiliate or Multi-Level Marketing

What is upward mobility?

Rising from a lower to higher social class or status.

Using the "Rule of 72," how many years will it take for the below investment to double: $2,000.00 invested in the year 2017 at an annual rate of return of 12%

Rule of 72 = 72/12 = 6 years