Final Exam Review

Question 1

Credit

Answer 1

Is the ability to borrow money with the promise that you’ll repay it later. You may use credit to pay for things you can’t pay for immediately, like small loans from day-to-day.

Question 2

Debt

Answer 2

The money you’ve already borrowed but haven’t paid back yet. If you don’t pay off all the debt you owe on your account, you’ll usually be charged interest, which is the cost of borrowing money.

Question 3

Credit Cards

Answer 3

Borrowing money that is accompanied by interest and sometime fees. The average interest rate for a credit card is between 19.99% to 23.99% APR.

Question 4

Debit Cards

Answer 4

Money you have immediate access to in your bank account

Question 5

Credit Report

Answer 5

A document which lists a borrower’s credit history, by using lenders to determine risk levels with issuing credit.

Question 6

Credit Score

Answer 6

-Is a three digit number that comes from the information in your credit report. it shows how well you manage credit and how risky it would be for a lender to lend you money.

Question 7

TDSR/GDSR

Answer 7

Is the percentage of the total annual mortgage
Principle+Interest+Taxes+Utilities/Gross Annual Income

TDSR- Is the percentage of gross annual income required to cover all other debts and loans in addition to the cost of servicing the property and the mortgage.

Question 8

Interest Rate

Answer 8

is the cost of borrowing money or the reward for saving money, expressed as a percentage of the amount borrowed or saved over a specific period.

Question 9

Credit card Statement

Answer 9

a document showing all of your acitivty within a billing cylce. A billing statement is provided once a month

Question 10

Revolving Credit

Answer 10

you have a credit limit that you can’t exceed when using the account for purchases.

Question 11

Installment Credit

Answer 11

is a loan for a specific amount of money, including interest and fees that you repay in fixed, regular payments (instalments) for a specific number of months.
Ex)auto loans, mortgages, student loans

Question 12

Consolidation

Answer 12

refers to taking out a new loan or credit card to pay off other existing loans or credit cards. By combining multiple debts into a single, larger loan, you may also be able to get more favourable pay off terms, such as lower interest rates, lower monthly payments, or both.

Question 13

Bankruptcy

Answer 13

A legal process performed under the bankruptcy and Insolvency Act to help a person cope with a financial crisis.

Question 14

Cosigner

Answer 14

Someone who signs on a loan and will take responsibility if the primer borrower does not pay. It also impacts your credit score and financial opportunities for several years.

Question 15

Trustee

Answer 15

Someone assigned to manage your bankruptcy or consumer proposal under the bankruptcy and insolvency act to manage assets held in trust.

Question 16

Principle amount

Answer 16

The amount being borrowed

Question 17

Debtor

Answer 17

A person or business who someone borrows money from.

Question 18

Consumer proposal

Answer 18

A legal procedure that stops creditors from taking legal actions against people in debt.

Question 19

Taxes

Answer 19

Is money that individuals and businesses pay to the government. The government uses this money to provide public services and country benefits

Question 20

Income tax

Answer 20

Is money that individuals and businesses pay to the government based on the income they earn. If you are under 18 and make less than $15,705b per tax year, that’s when you will receive a partial refund on the tax you paid.

Question 21

Sales tax

Answer 21

is a percentage-based fee added to the price of goods or services you purchase. It is collected by the seller and paid to the government.

Question 22

Property tax

Answer 22

is a tax you pay to the local government based on the value of the property you own, such as your home, land, or other real estate.

Question 23

Liability

Answer 23

Owing money, like a loan or credit card debt.

Question 24

Asset

Answer 24

is anything valuable that a person, business, or organization owns

Question 25

Customs and Duties

Answer 25

the tax put on goods when they are transported across international borders

Question 26

Tariff (s)

Answer 26

tax on goods and services imported into a country, typically to increase the price of imported goods, making them more expensive than in country goods.

Question 27

T4 Statement

Answer 27

is a summary of your employment earnings and deductions for the year.
Includes: tax year, employer’s name + address, your SIN

Question 28

Pay stub

Answer 28

is a document that summarizes an employee’s pay information for a specific pay period.

Question 29

Gross pay

Answer 29

The amount of income you earn before any deductions.

Question 30

Net pay (take home pay)

Answer 30

The amount of income you earn after tax deductions.

Question 31

Summer student position

Answer 31

Usually full-time and scheduled Mon-Fri. This is good for collage and uni students, allowing them to work during the summer months starting in May and ending at the end of August.

Question 32

Seasonal Employment

Answer 32

Is a temporary worker who is hired to meet a business’s staffing needs during peek periods, such as holidays, high seasons, and other busy times. Usually paid similarly to a part-time worker.
Ex: Camp counsler, server, retail, lifeguard

Question 33

Casual Employment

Answer 33

Unreliable, occasional, and unpredictable.
Ex: Security, referee, babysitter, personal assistant.

Question 34

Part-time employment

Answer 34

-Working fewer hours compared to a full-time job and not as constant.
-20 hours/week or less
Ex: Cashier, waiter, stockroom worker

Question 35

Full-time employment

Answer 35

Requires 32-40 hours per week. Constant schedule.
ex: Teacher, mechanic, police officer.

Question 36

Salary

Answer 36

Getting paid a set amount no matter what you do.

Question 37

Wage

Answer 37

Earning an income based on the hours you have worked, usually an hourly rate is $15/h.

Question 38

Contract income

Answer 38

is money you earn by providing services or completing tasks based on a contract. Instead of being a regular employee, you’re paid specifically for the work you agreed to do.

Question 39

Cash advances

Answer 39

is like borrowing money from a future paycheck or another form of income. It’s a way to get quick access to cash when you need it urgently. However, it’s typically more expensive than other types of loans because of higher fees and interest rates.

Question 40

Balance Transfers

Answer 40

is when you move debt from one credit card (or loan) to another, usually to take advantage of lower interest rates. It’s like shifting your debt to a new home with cheaper rent.

Question 41

Down payment

Answer 41

Is a sum a buyer pays upfront when purchasing an expensive good such as a home or car. It’s usually a percentage of the total cost, and the rest is covered by a loan or financing.

Question 42

The 5 C’s of Credit

Answer 42

1. Character: refers to credit history (credit score).
2. Capacity: measures the borrowers ability to repay a loan by comparing the borrowers debt-to-income ratio.
3. Capital: the amount of money you have available to you.
4. Collateral: can help a borrower secure loans.
5. Conditions: lenders look at the general conditions relating to the loan. May include the length of time that an applicant has been employed at their current job, how their industry is performing, and job stability.