Personal Finance

Franklin is planning for a purchase of a vehicle in two years. Since he wants to be certain that his funds are safe (insured), which of the following should he use?

Savings account

Disposable income

The amount a person or household has to spend

Net worth

The amount you would have left if all assets were sold and all debts were paid in full

To calculate the time value of money, we need to consider all of the following except the:

Type of investment

Not correct statement:

Using credit can increase the amount of money that will be available to spend in the future.

At the end of the year, employees receive a ____ form that reports annual earnings and the amounts deducted for taxes from their employers

W-2

If you are denied credit:

You are entitled to a free copy of your credit report

Ricky has a conventional mortgage. He can monitor the reduction of his loan balance through his payments by using _____ information.

amortization

Blank endorsement

an endorsement consisting only of the endorser's signature

The current financial position of an individual or family is best presented with the use of a:

balance sheet

Pauline just submitted an offer on her dream home. As evidence of good faith , she also included a(n)

earnest money

The lowest payment does not necessarily mean the best credit plan. If your car loan is a long period of time, you may end up owing more than the car is worth, which is called

negative equity

Which of the following will likely provide the most expensive loans?

payday loan company

Lease

provides the tenant protection from rent increases

line of credit

the maximum amount of money a creditor will allow a credit user to borrow

At the end of the year, Walter received a form that showed his payments from independent contracting. That form is called a

1099

Residual Value

Expected value of a vehicle at the end of a lease

Variable expenses

Expenses that change from month to month (cash outflow)

Compounding

Future value computations (earning interest on previously earned interest)

When creating a budget, it is important to:

"Pay yourself first" by setting aside savings before other expenses are budgeted

If Jack was in a 25% tax bracket and received a $1,000 tax deduction, by how much would his taxes be reduced?

$250

The insurance coverage provided by the FDIC for a savings account is ________ per depositor per insured financial institution.

$250,000

Patrick Guitman has a net worth of $145,000 and liabilities of $155,000. What are his total assets?

$300,000

Ursula wants to have an interest rate that can increase or decrease during the life of her loan. She should look for a(n)

ARM

When calculating federal income taxes, what increases "gross income"?

Alimony (money paid when divorced)

A service contract:

Covers the repair costs of a product

Heidi plans to purchase a pickup truck. The range available for negotiation is the difference between the sticker price and the:

Invoice price

Average tax rate

The tax based on the total tax due divided by taxable income

AMT (alternative minimum tax)

The tax designed to ensure that those who receive tax breaks also pay their fair share of taxes