| Term | Definition |
|---|
| Gross Domestic Product (GDP) | the final value of all goods and services produced in the country in one year |
| wage | earnings paid by the hour/ unit of production |
| salary | earnings paid weekly, monthly or on a yearly basis |
| wealth | the value of things you own |
| net worth | individual's wealth after debts have been subtracted |
| rent | payments for the use of someone's property |
| interest | the income earned from allowing someone else to use your financial capital |
| disposable income | money you take home after taxes are paid |
| expectations | what people think or hope will happen in the future |
| budget | summarizes individual's planned income and spending over a specific time period |
| rate of return | percentage of interest or the amount of dividends paid on savings or on an investment |
| stock | ownership in a corporation |
| market risk | the potential decrease in the value of stock in a stock market |
| inflation | general rise of overall prices |
| principal | an initial amount of savings |
| compound interests | interest calculated on the sum of savings plus the accumulated interest |
| liquidity | when any asset such as savings or stock can be converted into cash |
| certificate of deposit (CD) | receipt issued by a bank to a person depositing money in an account for a specific period of time |
| tax deferment | payment of taxes on interest after interests is earned |
| individual retirement account | type of retirement account that an individual can establish with a bank |
| 401 (K) plan | for-profit company retirement plan allows employees to save up to a certain amount of income per year and avoid paying taxes on income until withdrawn |
| Employee Stock Ownership Plan (ESOP) | employer sponsored retirement plan that allows employees to purchase employer's stock at a reduced price |
| Share of Stock | share of ownership in a corporation |
| dividends | profits distributed to stockholders |
| bonds | promise to repay borrowed money at a fixed rate of interest |
| mutual funds | a pool of money used by a company to buy an asset |
| credit | the ability of a customer to buy goods/services before paying them |
| finance charge | total amount paid to use credit |
| collateral | capital acceptable to a lender for loan |
| co-signer | a person who has a good credit rating and guarantees to pay off your loan if you can't |
| annual percentage rate | apr: cost of credit calculated as an annual percentage of the principal borrowed |
Combine with other sets
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