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WISE Financial Literacy Certification Terms Review 2023/2024 -Solved 100%
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WISE Financial Literacy Certification Terms Review 2023/2024 -Solved 100%
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WISE Financial Literacy Certification Terms Review 2023/2024 -Solved 100%sources of income - ANSWER-wages
gifts
government benefits
capital gains
exemption - ANSWER-a deduction allowed by law to reduce the amount of income that would otherwise be taxed
liquidity - ANSWER-the ease in which an asset can be bought or sold
ex. cash, stocks/bonds, checks, gold/precious metals, checking and savings acounts
gift cards - ANSWER-a card with a specified amount of credit on it redeemable at a specific store
discretionary income/budget surplus - ANSWER-the amount of income left for spending after taxes
money orders - ANSWER-exchangeable for cash
works like a check
bought if you don't have a bank account
why US currency has value - ANSWER-the government has declared that money is acceptable for paying debts
opportunity cost - ANSWER-the value of the best alternative given up
who is and is not hurt by inflation - ANSWER-companies and borrowers (not hurt)
workers, recipients of fixed incomes, and savers (hurt)
US treasury department - ANSWER-manages government revenue
they issue bonds, notes, and bills
pay yourself first - ANSWER-put money into savings and retirement accounts to avoid spending it
certificate of deposit (CD) - ANSWER-a certificate issued by a bank to a person depositing money for a specified length of time (at a set interest rate)
avoids holders from withdrawing funds on demand (before it matures)
maturity- when the term ends
if redeemed before matured, you may have to pay a fine or forfeit a portion of the interest you earned on it institutions that give loans - ANSWER-banks, credit unions (low interest)
pawnshops, finance companies, payday lenders, tax preparers (high interest)
credit union - ANSWER-a non profit-making money cooperative whose members can benefit from lower interest rates on loan and higher interest rates on investments
overdraft protection - ANSWER-when you write a check for more than is in your account, the bank covers it but you have to pay them back for the amount that they covered
compound interest - ANSWER-interest on the initial deposit + accrued interest
time value of money - ANSWER-money is less valuable over time unless invested (inflation)
it's better to have money now rather than later
rule of 72 - ANSWER-72 / interest rate (in %) = doubling time
Endorsement - ANSWER-Signing the back of a check
reconcile - ANSWER-Comparing your bank statement to you check register for differences
tax anticipation loans - ANSWER-loans to be payed back by an anticipated tax return
credit card cash advances - ANSWER-cash from an ATM charged to a credit card
high interest rates
truth in lending act - ANSWER-federal law designed to assure that every customer who needs consumer credit is given meaningful information concerning the cost of such credit
consequence of paying minimum payment of paying a credit card bill - ANSWER-credit score falls
interest rate increases - never seems to be able to pay off card
how degree of risk influences the interest rate charged for credit - ANSWER-the higher the risk, the higher the interest rate
debt to credit ratio - ANSWER-percentage of debt relative to your total credit
expressed as a percentage
credit reports - ANSWER-information about last known and previous address, last known employer, monthly debts, loan repayment history, and credit balances vs available limits
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