financial Flashcards

1
Q

what is a need

A

a need is something necessary to live and function eg; home and food

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2
Q

what is want

A

is something that can improve your quality of life
eg; branded bags and clothes

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3
Q

what is savings

A

set aside income so it can be available in the future or in case of emergency

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4
Q

types of saving accounts

A

basic bank accounts, online savings, higher interest accounts, child or student saving accounts

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5
Q

sources of household income

A

wages;salary , government payments and allowances, investment income, gifts

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6
Q

importance of preparing a budget

A

it gives you a informed decisions that helps you know how much to spent

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7
Q

what is budgeting

A

a strategy to ensure your not spending more then you have to and to ensure your achieve your saving goals

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8
Q

types of investments

A

term deposit, superannuation, property, shares, risk versus return, ethical and social considerations

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9
Q

whats term deposits

A

saving account offering a higher lever of interest, but with a requirement to leave the money for a specified amount of time

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10
Q

superannuation

A

an investment that everyone makes as they enter the workforce

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11
Q

property

A

it’s a big investment because you can invest surplus cash and or rent it out and it will provide additional rental income

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12
Q

shares

A

a part ownership in a company where profits made by the business are paid to shareholders as dividends.

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13
Q

calculate simple interest

A

Calculate the deposited amount (principal), by multiplying the interest rate, and then multiply by length of time (number of years)

eg $1000 x 10% x 2= $200

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14
Q

calculate compound interest

A

Calculate the amount invested (principal amount), by multiplying the interest rate.
eg; $1000 x 10%= $100

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