A - Managing personal finance

Question 1

Interest rate

Answer 1

the cost of borrowing money or the reward for saving money.

Question 2

Debt

Answer 2

money owed

Question 3

Credit rating

Answer 3

a score given to individuals on how likely they are to repay debts based upon their previous actions

Question 4

Bankrupt

Answer 4

when an individual or organisation legally states its inability to repay debts

Question 5

Solvent

Answer 5

the ability to meet day-to-day expenditure and repay debts

Question 6

Current account

Answer 6

an account with a bank or building society designed for frequent use, e.g. regular deposits and withdrawals

Question 7

Overdraft

Answer 7

the ability to withdraw money that you do not have from a current account

Question 8

Expenditure

Answer 8

the amount of money you need to cover all your expenses/outgoings, e.g. your mortgage and bills

Question 9

Shareholder

Answer 9

someone who has invested in a company in return for equity, i.e. a share of the business

Question 10

Saving

Answer 10

placing money in a secure place so that it grows in value and can be used in the future

Question 11

Investment

Answer 11

speculative commitment to a business venture in the hope that it generates a financial reward in the future

Question 12

Insurance

Answer 12

an agreement with a third part to provide compensation against financial loss in line with the conditions laid down in the policy agreement

Question 13

Premiums

Answer 13

regular payments made by an individual or company to an insurance provider in return for protection