Chapter Three Flashcards

1
Q

A recent study shows that ___ of Americans couldn’t cover a $400 financial emergency without going into debt

A

36%

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2
Q

In fact, 45% of Americans have less than _____ saved for an emergency.

A

$1,000

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3
Q

14% of Americans have ___ saved.

A

0%

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4
Q

Emergency Fund:

A

a savings account set up specifically to be used to cover financial emergencies

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5
Q

Large Purchase:

A

a purchase that requires a significant amount of money

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6
Q

Three reasons to save:

A

emergencies, large purchases, and wealth building.

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7
Q

___ of millionaires said they live on less than they make.

A

94%

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8
Q

___ of millionaires say they plan and save in advance for big expenses—compared to 67% of the general population.

A

95%

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9
Q

The first foundation

A

saving a $500 emergency fund

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10
Q

___ of Americans don’t feel they would be able to cover a $400 emergency

A

36%

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11
Q

A purchase is worth the emergency fund if

A

it is unexpected, necessary, and urgent.

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12
Q

The third foundation:

A

save cash for your car

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13
Q

Interest rate:

A

the percentage of principal charged by the lender for the use of its money

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14
Q

Accrued Interest:

A

the amount of interest charged on a debut but not yet collected; interest accumulates from the date a loan is issued

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15
Q

Compound growth:

A

the average rate of growth for an investment over time; often expressed as an annual figure,

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16
Q

__ of Americans have nothing saved for retirement,

A

25%

17
Q

Compound interest:

A

interest paid on interest previously earned

18
Q

Principal:

A

the initial amount of money invested or borrowed.

19
Q

Rate of return:

A

the measure of an investments profit or loss, usually expressed as a percentage of the initial investment

20
Q

Inflation

A

the persistent rise in the cost of goods and services over time.

21
Q

Time Value of Money:

A

concept that an amount of money is worth more today than in the future due to earning potential.