Chapter 4: Financial Services Flashcards
1
Q
What does APR stand for and what does it mean?
A
APR=annual percentage rate; simple interest
2
Q
What does APY stand for and what does it mean?
A
APY=annual percentage yield; compound interest
3
Q
What is simple interest?
A
Only have interest on the money put in
4
Q
What is compound interest?
A
Have interest on the entire amount of money, including interest already paid
5
Q
Should you use savings or loans?
A
Compare the interest rates or the two, but it may be better to leave the money in the savings to collect interest and just pay the minimum on loans
6
Q
What should the balance always be on credit cards?
A
Zero
7
Q
What are types of accounts
A
- Checking
- Savings
- Reserve
