Personal Finance Economics 1 – Flashcards
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Automobile Insurance
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This is used as protection against financial loss in the event of an accident while driving, or theft.
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Bond
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This is a contract to repay borrowed money, often issued by a company. This issues financial security for a debt.
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Certificate Of Deposit
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This type of investment account has a specific fixed term/length, fixed interest rate, is insured by the FDIC, and is very low risk to consumers.
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Compound Interest
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This is a method of calculating interest in which the interest is added to the principal each period so that the principal continues to grow throughout the life of the loan or investment. The formula is A = C * (1 + r/100)n where A is the future value, C is the principal, r is the interest rate per period, and n is the number of periods.
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Credit
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Ability to obtain goods and services before payment, or money lent or made available, both with specific guidelines for repayment.
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Credit Union
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a nonprofit cooperative that accepts deposits, makes loans, and provides other financial services
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Credit Worthiness
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This is a measurement as to the likelihood of whether or not a person will default on a loan provided to them by a lending institution.
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Current Yield
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The annual interest rate paid by a bond. It does not reflect the interest rate paid over the life of the bond.
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Debt
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This situation occurs when an entity- a person, business, or government- owes money to another entity.
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Deductible
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The dollar amount of expenses that must be paid out of pocket before an insurer will pay any expenses for loss or liability.
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Disability Insurance
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A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.
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Disposable Income
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This is the economic term that refers to one's total income that is left following the payment of all required taxes.
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Earnings
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This is a payment usually of money for labor or services usually according to contract and on an hourly basis.
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Excise Tax
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This is a tax on production, transportation, sale or consumption of a certain good or service.
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Health Insurance
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This is used to pay for expenses related to maintaining the wellness of a person. Among countries, there are many varieties of government and privately-sponsored programs.
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Incentive
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Any factor, usually financial, to influence one choice over another by an individual or business.
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Income
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This is money that is gained for goods or services by an individual or business.
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Income Tax
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This is a tax levied on net personal or business income.
