first test Flashcards
inflation
the rise of prices or drop in dollar value
debt
owe money to institutions or individuals
escrow
a deposit on land or home to insure payment of loan
finance charge
the penalty charged for being late or missing a payment
credit
the ability to buy now or pay later
premium
an amount to be paid for insurance typically
mortgage
a regular payment of principal and interest on land or home
FICO score
credit score according to the Fair Isaac Corporation
bankruptcy
filing a chapter of complete debt with the government
ability to pay
the amount creditors estimate one’s ability to pay reasonably
regressive tax
the parentage of tax stays the same as ability to pay increases
impulse buying
buying unneeded purchasing due to impulse
wage inequality
when wages rise but low paying jobs still suffer
budget
taking income and figuring out how much to spend on expenses
interest
the dollar amount you are charged for borrowing money
portfolio
variety of all investments held by account
money market
higher interest-bearing saving account with limited check-writing or withdraws
return
the benefit of an investment divided by its cost
capital gain
profit from the sale of property or investment
P/E ratio
method for valuing company that measures its current share price in relation to earnings
compound interest
addition of interest by reinvesting interest
prime rate
interest rate commercial banks charge
rule of 72
72 divided by rate of return = number of years for initial investment to double
deffered compensation
portion of income paid out later as part of pension or retirement plan
mutual fund
diversified portfolio managed by professional brokers with specific investment objectives
depreciation
the decrease in value of an asset
assets
cash, accounts receivable, inventory
risk
potential of gaining or losing value of investment
liquidation
assets are sold to repay creditors or redirect investment spending
merger
combining of 2 companies into one large company
