Questions and Answers
Randy earns $22 per hour. This is an example of:
What is a credit score?
A number that represents the risk a lender takes on a borrower.
Phil Reagan has written a check to USA Electronics for $152.65. Is this check filled out correctly?
False
An account that allows you to save money, as well as make deposits and withdrawals.
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How is the employee paid?
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When budgeting, large expenses should be __________________.
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A secured loan is backed by __________________.
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Jimmy has poor credit, but would like to repair his credit with a credit card. For what type of card should Jimmy apply?
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What is the total amount of debt this person owes?
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Consumer credit can help a lender determine how much a borrower is charged to borrow money.
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What is the definition of a 'want'?
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A __________ allows you to invest your money with a set interest rate for a pre-set period of time.
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Is debt-to-income a factor when a lender is assessing whether to loan a borrower money?
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Wages, salary, and commission are examples of what type of income?
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James earns 10% of every sale he makes. This is an example of:
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Credit allows you to?
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What is an interest rate?
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Income generated by selling an investment at a higher price than you paid for it.
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What is the status of this account?
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What is principal?
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The quality, state, or fact of being able to generate, create, enhance, or bring forth goods and services.
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How many credit accounts does this person have?
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Which influence on spending deals with a person's family, friends, and cultural environment?
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Lillian purchased a house for $150,000. Lillian and her husband invested $50,000 into home improvements. Lillian and her husband were able to sell the house for $200,000. Is this an example of portfolio income?
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The life of a CD (Certificate of Deposit) can range from a few ____________.
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Education, training, and experience are some factors that influence earned income.
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Money you earn from assets you have purchased or created. Generally recurring income.
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Using misleading product images is an example of what type of deceptive advertising?
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Using this graph, which budget item has the largest allowance?
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How many hours did this employee work during this pay period?
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What is interest?
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How many hours of vacation has this employee used for this pay period?
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Meredith received a refund of $500. Meredith needs a new laptop, but she would also like to go on vacation to the Bahamas. If Meredith purchases the laptop, what is her opportunity cost?
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The top salary you can make.
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What is a credit card?
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How many payments have been late by at least 30 days?
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An account that allows you easy access to your money and allows the use of checks and debit cards.
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Study Notes
Personal Financial Literacy Concepts
- Wages: Randy earns $22 per hour, illustrating the concept of wages in employment income.
- Credit Score: Represents the risk a lender takes on a borrower, typically a numerical value affecting borrowing terms.
- Incorrect Check: Phil Reagan’s $152.65 check to USA Electronics is noted as filled out incorrectly.
- Account Types: A checking account allows deposits and withdrawals while providing easy access to funds.
- Employee Payment: Employees are often compensated through wages.
- Budgeting Large Expenses: Should be divided equally across all paychecks to manage cash flow effectively.
- Secured Loans: These loans are backed by collateral, providing security to lenders.
- Secured Credit Card: Recommended for individuals like Jimmy with poor credit to help rebuild their credit score.
- Total Debt: An individual may owe a total debt amounting to $20,475.
- Consumer Credit: Helps lenders assess how much to charge borrowers for loans.
- Wants vs. Needs: A “want” is defined as something desirable to have but not essential.
- Certificate of Deposit (CD): Allows investment of funds at a set interest rate for a predetermined duration.
- Debt-to-Income Ratio: Important factor for lenders when evaluating loan applications.
- Types of Income: Wages, salary, and commission types of income are categorized as earned income.
- Commission: James earns 10% from every sale, exemplifying commission-based income.
- Use of Credit: Enables immediate purchase with delayed payment.
- Interest Rate: The cost incurred for borrowing money, charged by lenders.
- Portfolio Income: Gained by selling investments at a profit.
- Account Status: Account can be labeled as potentially negative but closed.
- Principal: Refers to the non-interest portion of a loan amount.
- Productivity: The ability to generate and deliver goods and services effectively.
- Credit Accounts: Individual may have a total of 10 credit accounts.
- Cultural Influence on Spending: Family, friends, and cultural contexts significantly impact spending behavior.
- Portfolio Income and Real Estate: Lillian’s house sale scenario does not qualify as portfolio income despite the profit.
- Certificate of Deposit Duration: Typically ranges from a few months to several years.
- Factors Influencing Earned Income: Education, training, and experience are crucial determinants of earned income potential.
- Passive Income: Income generated from assets that typically recurs without active involvement.
- Deceptive Marketing: Misleading product images fall under deceptive descriptions in advertising.
- Budget Allocation: Graph analysis often shows housing as the largest budget item.
- Work Hours: Employees commonly work 80 hours during a standard pay period.
- Interest Definition: This is the cost of borrowing money, represented by a specific rate.
- Vacation Hours Used: An employee may use 18 hours of vacation within a pay period.
- Opportunity Cost: If Meredith chooses to buy a laptop instead of going to the Bahamas, her opportunity cost is the vacation.
- Earning Potential: The maximum salary a person can achieve in their career or job role.
- Credit Card Definition: A bank-issued card that enables purchasing goods and services on credit.
- Late Payments: An individual may have six payments that were late by at least 30 days.
- Access to Funds: A checking account provides convenient access and facilitates the use of checks and debit cards.
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Description
Test your knowledge on personal financial literacy with these flashcards. From understanding wages to credit scores and checks, this quiz covers vital financial concepts to enhance your financial skills.
