Chapter 01 - Introduction

Question 1

All of the decisions and activities of an individual or a family regarding their money, including spending, saving, budgeting, etc.

Answer 1

Personal Finance

Question 2

The granting of a loan and the creation of debt; any form of deferred payment

Answer 2

Credit

Question 3

A person or organization that uses a product or service

Answer 3

Consumer

Question 4

An obligation of re-payment owed by one party (the debtor/borrower) to a second party (the creditor/lender); in most cases this includes repayment of the original loan amount plus interest

Answer 4

Debt

Question 5

A system by which goods and services are produced and distributed

Answer 5

Economy

Question 6

The knowledge and skill-set necessary to be an informed consumer and manage finances effectively

Answer 6

Financial literacy

Question 7

A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as a percentage of the principal (original loan amount)

Answer 7

Interest

Question 8

A debt evidenced by a “note,” which specifies the principal amount, interest rate and date of repayment

Answer 8

Loan