MATH QUIZ 2
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30 terms
Terms | Definitions |
|---|---|
 Annuity | any collection of equal payments made at regular time intervals |
| Annuity's future value | a sum of money to which an annuity's payments and interest accumulate in the end |
| annuity's present value | a sum of money paid at the beginning of an annuity |
| ordinary annuity | an annuity whose payments are made at the end of each time period |
| annuity due | an annuity whose payments are made at the beginning of each time period |
| future value annuity factor | the future value that would accumulate if each annuity payment was $1 |
| present value annuity factor | the present value if each annuity payment was $1 |
| sinking fund | an annuity for which the amount of the payments is determined by the future value desired |
| amortization | the process of repaying a loan by making all payments of equal size |
| amortization table | provides a payment-by-payment detail of how each dollar paid on a loan is allocated |
| dividend yield | expressing a stock's dividend rate as a percent to make comparisons more meaningful |
| yield to maturity | measure of a bond's interest rate that will be earned assuming the bond is held to maturity |
| junk bonds | bonds of issuers whose ratings suggest there is cause for concern |
| net asset value | value of one share of a mutual fund |
| investment portfolio | a mix of investments in different securities |
| asset allocation | how an investor decides to divide his portfolio among different asset classes |
| open end | a type of mutual find that does not have a fixed number of shares |
| load | a fee paid when a mutual fund is purchased |
| defined benefit plan | retirement program that provides a set income in retirement |
| defined contribution plan | employer contributes money to a retirement account for each employee on the basis of some set formula |
| vested | what you become in a retirement plan when you accumulate a certain number of years of service |
| step-vesting | tells what percent of benefits you are entitled to when you leave and depends on your years of service |
| ira | a special type account that can be set up by an individual to save for retirement |
| roth ira | contributions to this IRA are not tax deductible but their investment growth is not taxed while the money is in the account |
| 401K | type of retirement account offered as a benefit by employers and money contributed to this account is not included in taxable income |
| inflation | the tendency of prices to rise over time |
| Sales tax | imposed by state and/or local governments on retail sales |
| taxable income | the portion on income subject to tax |
| exemption | an amount of nontaxable income for each person who can be claimed as a dependent |
| fica | Federal insurance contributions act (includes social security and medicare) |
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