Chapter 19 - Personal Finance Flashcards
Budgeting is getting control of what you spend.
It will prevent going into debt and makes life easier.
Financial institutions pay you a percentage of that money you save.
Interest
The amount of interest depends on
the interest rate or the percentage a bank will pay to depositors or charge to borrowers.
As a borrower…
you would want a low interest rate
Ways of saving include…
Passbook account, Money Market, deposit, money market mutual funds, certificate of deposit or CD.
Our society depends more and more on…
credit, or borrowing, to pay for purchases.
Creditors decide whether to…
lend you money and how much interest to charge
A creditor is a…
person or institution, to whom you owe money.
is used mostly to buy homes or cars. If you don’t make the payments, the lender takes back the house or car.
collateral
is obtained at the bank after you make a deposit about $300 and you get a credit card and can make purchases up to that amount.
secured credit
are not limited and there is just a promise to pay
Unsecured cards
Business organizations include…
sole proprietorship (owned by one person)
owned by two or more
partnerships
are business that have rights and responsibilities of an individual and are made up of stockholders who invest and receive profits.
Corporations
own a share in a corporation
Stockholders
