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9 Career Preparedness Semester 2 Exam

Terms in this set (45)

interest
money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt
can raise the amount of your money in the bank; can make money you owe worth more
How can interest work for you? How can interest work against you?
interest-bearing account
checking accounts that usually require a minimum balance to open and you may need to maintain an even higher balance to avoid fees
monthly on your checking account
How is interest usually paid?
debt
money that is legally owed to another individual or business
increase the original amount of money
What impact does time and interest rate have on investments?
credit card
a small plastic card issued by a bank or business; allows the holder to purchase goods or services on credit
simple: interest earned on the original principal
compound: interest earned on original principle and previous interest earned
What is the difference between simple and compound interest?
unexpected expense
an expense that isn't expected
savings
the money that one has saved, especially through a bank or official scheme
w-4 form
form used by your employer to determine the amount of taxes to withhold from your paycheck
i-9 form
the employee eligibility verification form; US citizenship and immigration services form
payroll deduction
amounts withheld from an employee's payroll check by the employer; insurance pension contributions, wage assignments, child support payments, taxes, and union and uniform dues
life insurance, health insurance, retirement plan contributions
What are examples of voluntary payroll deductions?
federal income tax, social security tax, medicare tax, state income tax, local tax
List the required payroll deductions.
gross pay
the original amount an employee earns
net pay
the amount of money a person receives after deductions
bank
a financial establishment that invests money deposited by costumers, pays it out when required, makes loans at interest, and exchanges currency
ATM
an electronic banking outlet, which allows costumers to complete basic transactions without the aid of a branch representative or teller
bank reserve
banks' holding of deposits in accounts with their central bank
FDIC
a US government corporation operating as an independent agency created by the banking act of 1933; the federal deposit insurance corporation
bank failure
the closing of an insolvent bank by a federal or state regulator
deposit
a sum of money placed or kept in a bank account, usually to gain interest
fraud
a person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities
inflation
a general increase in prices and fall in the purchasing value of money
CD
a savings certificate entitling the bearer to receive interest; bears a maturity date, a specified fixed interest rate and can be issued in any denomination; generally issued by commercial banks and are insured by the fdic; term generally ranges from 1 month to 5 years
time deposit
a deposit in a bank account that cannot be withdrawn before a set date or for which notice of withdrawal is required
checking
an account at a bank in which checks can be drawn
savings
account that earns interest
money market
financial account that pays interest based on current interest rates in the money markets
fringe banking business
any retailer that provides high-interest loans to consumers not served by traditional banking institutions
stocks
signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings
bonds
a debt investment in which an investor loans money to an entity that borrows the funds for a defined period of time at a fixed interest rate
spending plan
What should individuals use to help determine where they have been spending their money and how much is being spent in each budget category?
not to spend more than you earn
What is the main goal of budgeting?
spending plan
a budget or plan so that you do not spend more money than you bring home each month
take home pay - expenses
How do you calculate potential savings?
need
something someone cannot live without
want
makes life more luxurious
sales tax
taxes that are based on the selling price of goods and services
tax percentage * cost of item
How are sales taxes calculated?
3-8 years
How long will it take individuals to pay off a car loan?
the worse the credit score, the higher the interest rate
How does your credit score affect interest rates?
residual value
the amount you can buy a car for at the end of a lease
3-5 years
How long does a typical manufacturers' warranty covering a new car or truck last?
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