Personal Finance - Final

Lower: more

Longer loan periods generally mean ________ payments, but the borrower will pay ______ over the life of the loan.

Interest

One way to think of _________ is as the rental fee paid for temporarily using someone else's money.

tax revenue

Public programs such as national defense, public schools, Social Security, and fire and police protection are all paid for through_______.

- shorter term - higher interest rate - high credit score

Sally and George each buy a house in the same neighborhood for $250,000. Sally's monthly mortgage payment is $400 more per month than George's. What could explain this?

paying

Signing a loan contract means that you are legally responsible for _______ the loan.

repossess

The item purchased with a personal loan can be used as collateral for the loan, meaning the lender can do this if you do not pay. __________

foreclosure

The lender may place your home in _______________ when you stop making payments on your house.

line of credit

The term for money that a lender makes available to a borrower with the understanding that the borrower will repay the money at a future time?

taking tax payments out of an employee's pay before he or she receives it

Wgat does the term withholding mean in reference to your paycheck?

- more convient - freedom - pay for insurance/ gas - responsible for damages

What are 2 adv. and 2 dis.?

- can boost credit score - convient - in dire need of money - get loans faster - lower interest rates

What are some advantages of using credit?

- how much money - state - married - # of dependents

What factors play a role in determining how much money to withhold from your paycheck for income tax purposes?

ACV pays the original price of the item - depreciation RC will pay you back in full for the original price and sometimes includes appreciation.

What is the difference between actual cash value and replacement cost value for homeowner's insurance?

IRS (Internal Revenue Service)

What is the name of the body of government that enforces federal tax laws and collects taxes_____?

To set a limit so you don't over spend on unnecessary items also insures your cash inflows are greater than your cash outflows

What is the purpose of a budget?

Certificate of Deposit

What savings vehicles would work best for a 25 year old, if he doesn't need access to the money for a number of years and wanted to earn the highest interest rate?

W-2

What tax form am I? I am received in January. There is one of me for every employer that you worked for in the previous year. I have information on how much you earned and how much you paid in taxes for the previous calendar year.

deductible

What the policyholder will pay out of pocket before insurance will begin paying for unforeseen incidents.

A year

When a bank says their savings account earns 1% interest that typically means you will earn 1% interest over what period of time?

insurance

Whether you lease or take out a loan, you will be required to have sufficient ______________ on your car.

property tax

Which tax is typically used to fund schools?

- reduce terms - pay less in interest

Why it's often a good idea to pay more than the monthly amount due on amortized loan?

- make sure the bank didn't make mistakes - check credit score - check for identity theft

give two reasons why it is important to periodically review your credit report.

book value

how much a particular car is worth based on its condition, mileage and other factors

lease

when you _______ a car, you pay only for the use of the car for a period of time, not for the value of the car.

stops paying

A borrower defaults when he or she __________.

save

A good budget will force you to ______ to take advantage of unexpected opportunities.

Premium

A monthly payment to ensure the insurance policy continues to cover unforeseen incidents.

Co-insurance

A percentage the policyholder and insurance company split when a claim is filed?

Budget

A__________ can help you save money for major purchases, unexpected expenses, and unexpected opportunities

Gross pay is before taxes and net pay is after taxes

Explain the difference between gross pay and net pay.

investing keeps up with inflation so your money won't decrease in value. (long term) Savings has lower interest so w/ inflation your money will decrease in value(short term)

Explain the difference between saving and investing

- use emergency funds - sell assets - part time work - cut back on unnecessaries - reduce consumption

Give examples of how you could stay financially wise in the revision.

property/ real estate

Homes, rental property, farms are all examples of ________.

- if you pay the minimum interest charges will accumulate - pay in full no fees

How does a person accure interest charges and how do you avoid paying any fees to a credit card company?

- easy to get a loan - build a credit score - save money

Identify 2 reasons why it is important for a young adult to establish credit.

- driving record - age - gender - location - make/model - smoker - credit score - safety devices

Identify four factors that are likely to increase the rate you are charged for your auto insurance.

Because they can arrest you for tax fraud

It is important to keep accurate, detailed financial information, why is this so?