Midterm Test Vocabulary

Question 1

The remains after the taxes are removed from gross income.

Answer 1

Disposable Income

Question 2

An expense that can’t be eliminated from your day-to-day life

Answer 2

Essential Expense

Question 3

A piece of data that is extremely different from the rest of the data

Answer 3

Outlier

Question 4

A cost for goods or services that are nonessential

Answer 4

Discretionary Expense

Question 5

Your income before all taxes are deducted

Answer 5

Gross Income

Question 6

To use an ATM you need a bank card and a PIN. PIN stands for:

Answer 6

Personal Identification Number

Question 7

Some banks offer this type of plan that pays a check even though there are not enough funds in the account.

Answer 7

Overdraft Protection

Question 8

A certificate that states you have a specific sum on deposit and guarantees the payment of a fixed interest rate until maturity, which is a specified date in the future.

Answer 8

Certificate of Deposit

Question 9

Comparing the bank statement with your check register to make sure no mistakes have been made is called this

Answer 9

Reconciling a Bank Statement

Question 10

A written order used to tell a bank to pay money from an account to the holder of the written order.

Answer 10

Check

Question 11

APR stands for

Answer 11

Annual Percentage Rate

Question 12

Money earned on the money deposited plus previous plus previous interest.

Answer 12

Compound Interest

Question 13

Compounding interest four times per year is called

Answer 13

Quarterly Compounding

Question 14

Interest that is based only on the original principal.

Answer 14

Simple Interest

Question 15

Relates principal, interest rate, the number of times interest is compounded per year, and the number of years the money will be on deposit to find the ending balance.

Answer 15

Compound Interest Formula

Question 16

The personal belonging a customer leaves with a pawn shop in order to borrow money.

Answer 16

Collateral

Question 17

This type of loan for post-high school education is issued by a bank, a credit union, a school, or even a state agency.

Answer 17

Private Loan

Question 18

A federal student loan that is based on need

Answer 18

Federal Direct Sub-sized Loan

Question 19

When a consumer purchases something to which they suddenly were attracted to and had no intention of buying.

Answer 19

Impulse Buying

Question 20

This person agrees to pay back the loan if the borrower is unable to do so.

Answer 20

Cosigner

Question 21

An agency that compiles records on all users of credit

Answer 21

Credit Reporting Agency

Question 22

When the last payment on a loan is much higher than the previous payments, it is call this.

Answer 22

Balloon Payment

Question 23

Whenever you borrow money, you sign this agreement, which states the conditions of the loan.

Answer 23

Promissory Note

Question 24

hese loans allow parents (or graduate students) to borrow money for college costs.

Answer 24

Federal PLUS Loans

Question 25

A federal student loan that is not based on need.

Answer 25

Federal Direct Unsubsidized Loan

Question 26

The maximum amount you can owe at any time on your credit card.

Answer 26

Credit Line

Question 27

This is the most common type of credit card where the entire bill does not have to be paid in full each month.

Answer 27

Revolving Charge Account

Question 28

The Truth-in-Lending Act requires all creditors to disclose key information about the credit card fees in the same exact format so consumers can easily read it and compare credit cards. The box that contains this information is called the?

Answer 28

The Schumer Box

Question 29

This act protects you if your card is lost or stolen.

Answer 29

The Truth-In-Lending Act

Question 30

This is the average of the amounts you owed each day of the billing period.

Answer 30

Average Daily Balance

Question 31

By law, drivers are _____________ to pay for the damages they cause with their automobiles.

Answer 31

Liable (responsible)

Question 32

This type of insurance is the most important coverage. It protects you if your driving causes injury to others or to other people’s property.

Answer 32

Liability Insurance

Question 33

This is a statistician who can predict how often customers, based on certain criteria, will submit claims.

Answer 33

Actuary

Question 34

This is the amount the policyholder must pay before the insurance policy pays any money.

Answer 34

The Deductible

Question 35

For most cars, their value becomes less than their purchase price over time. We say the value of the car __________.

Answer 35

Depreciates

Question 36

These are the extra hours worked by an employee that are more than the full-time number of hours.

Answer 36

Overtime hours

Question 37

This is a short account of your education and qualifications for employment.

Answer 37

A Resume

Question 38

These are additional compensations from your employer.

Answer 38

Benefits

Question 39

Stockbrokers, travel agents, authors, musicians, realtors, and salespersons may all be paid based on money from sales. They are paid a ______________.

Answer 39

Commission

Question 40

This is the sum of your hourly pay and your overtime pay.

Answer 40

Gross Pay

Question 41

This is the lowest hourly rate that can be paid to an employee in the United States according to federal and state laws.

Answer 41

Minimum Wage

Question 42

A compensation that an employee receives from an employer after retirement.

Answer 42

A Pension

Question 43

These types of employees are paid by production, rather than the length of time that it takes them to do the job.

Answer 43

Pieceworkers

Question 44

This is a benefit required by the government to offer assistance to employees who are injured while working at their job.

Answer 44

Workers Compensation

Question 45

Both Social Security Tax and Medicare Tax are withdrawn from your paycheck and are listed as the ________ tax.

Answer 45

FICA Taxes