Free Enterprise Test 4
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Created by:
LoganTalbert on April 11, 2011
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24 terms
Terms | Definitions |
|---|---|
 Wage | earnings paid by the hour or by unit of production |
| Salary | Earnings paid by weekly, monthly, or yearly basis |
| Wealth | The value of the things you own |
| Net Worth | refers to to an individuals wealth after debts and other obligations have been subtracted |
| Rent | The payment for the use of someone else's property |
| Interest | Income that you make from allowing someone else your financial capital. |
| Income | The more money you make, the more money you save |
| Expectations | If you are expecting to get a raise in the future, you save money then if you are expecting a cut back, you save money now. |
| Current Interest Rate | The higher the interest rate, the more you should save |
| Taxes | The higher the tax rate, the less you will save. |
| Budget | Summarizes an individual's planned income and spending over a specific time period. |
| Rate of Return | Refers to the percentage of interest or the amount of dividends pain on savings or on an investment |
| Principle | The initial amount of savings |
| Compound Interest Rate | Interest accrued based on a constantly changing prinicple |
| Liquidity | The ease with which any asset such as savings or stocks can be converted to cash |
| Certificate of Deposit | Is a receipt issued by a bank to a person depositing money in an account for a specified period of time at a fixed rate of interest |
| 401 (k) | Is a for-profit company's retirement plan that allows an employee to save up too a certain amount of income per year and avoid paying taxes on the income until it is withdrawn. Employees will often match a percentage of the employe's contribution. |
| Dividend | Profits distributed to stock holders |
| Bond | Is a promise to repay borrowed money to a lender at a fixed reate of interest at a specified time |
| Mutual Fund | Is a pool of money used by a company to buy assets, such as stocks or bonds, on behalf of its shareholders. It is a great way of diversifying your holdings and lowering your risks. |
| Credit | Is the ability of a customer to buy goods or services before paying for them, based on an agreement to pay later. |
| Consumer | Anyone who buys goods and services for personal use |
| Premium | The price people pay for insurance monthly |
| Co-signer | A person who has a good credit rating who agrees to repay the loan if you cannot. |
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