Personal Finance NGPF Flashcards

Questions and Answers

What is net pay?

The total amount before deductions

An account designed to hold money

The amount after deductions (correct)

The price paid for borrowing money

What is gross pay?

The amount paid in interest

The total amount after deductions

The total amount before any deductions (correct)

The length of time to pay off a loan

What is interest?

The price paid for the use of borrowed money

What is a checking account?

A bank account from which payments can be made Signup and view all the answers

What is a debit card?

A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder Signup and view all the answers

What is a credit card?

A plastic card used to make purchases now and pay for them later Signup and view all the answers

What is principal?

The amount of money borrowed Signup and view all the answers

What is loan term?

The length of time you have to pay off a loan Signup and view all the answers

What is a savings account?

An account at a depository institution designed to hold money not spent on current consumption Signup and view all the answers

What is compound interest?

Interest earned on both the principal amount and any interest already earned Signup and view all the answers

What is simple interest?

Interest paid on the principal alone Signup and view all the answers

What does it mean to invest?

To put money into something to try to earn more money Signup and view all the answers

Study Notes

Personal Finance Key Terms

Net Pay: The amount received in a paycheck after all deductions such as taxes, retirement contributions, and health insurance are taken out.
Gross Pay: The total earnings before any deductions are made; it includes wages, bonuses, and overtime pay.
Interest: The fee charged for borrowing money, typically expressed as a percentage of the principal amount over time.
Checking Account: A deposit account held at a financial institution that allows for frequent withdrawals and deposits, used primarily for everyday transactions.
Debit Card: A financial card that deducts money directly from the checking account when a purchase is made, providing instant access to funds.
Credit Card: A card that allows individuals to borrow money up to a certain limit to make purchases, with the obligation to repay the borrowed amount along with interest later.
Principal: The initial sum of money that is borrowed or invested, separate from interest or profits.
Loan Term: The specified duration in which a borrower is required to repay a loan, which can vary depending on the lender and type of loan.
Savings Account: A bank account intended for accumulating savings rather than for daily transactions, often earning interest on the deposited funds.
Compound Interest: Interest calculated on the initial principal and also on the interest that has been added to the principal, resulting in interest-on-interest over time.
Simple Interest: Interest calculated solely on the principal amount of a loan or investment, without compounding effects.
Invest: The act of allocating resources, usually money, to an asset with the expectation of generating income or profit over time.

Description

Test your knowledge of key personal finance terms with these flashcards. Each card provides a definition to help you understand concepts like net pay and interest. Perfect for anyone looking to enhance their financial literacy.