Personal finance Flashcards
Are tips are counted as compensation and included on a Wage and Tax Statement (W-2 form)
yes
What’s the purpose and content of a I-9, W-2 and W-4 (Employee Withholding Allowance certificate) forms
I-9: Verify employment eligibility and Provide acceptable forms of identification
W-2: List wages earned and taxes withheld for filing income taxes
W-4:Calculate the number of allowances for tax withholding and Determine how much is withheld from paycheck for taxes
Whats the formula for calculating sales tax?
Price of item x percentage of tax converted into decimal* = answer
Example😍🌈
$100 x 0.053 ( 5.3%) = $5.30
$100+$5.30= 105.30 (Final Price you pay at register)
what is the PACED Decision Model?
P- define the Problem A- List the Alternative C- list the Criteria E- Evaluate D- make a Decision
Define informative and persuasive advertising
Informative advertising- is win to convince you to buy something by giving you fax and reasons as to why this product is slay
Persuasive advertising- it might contain celebrity endorsement or try to appeal to emotion to get your purchase, but it’s not based on factual/informative reasons why this product is best
What are the four Ps?
Product—The need the product satisfies, product features, the size/color/style/etc. of the product, the product’s name and brand, the difference from competitor’s product, how/where customers use the product, the product’s packaging
Price—Value to the consumer, elasticity of demand for the product, price of competitors’ products, buyers’ income, discounts
Place—Target market, where consumers shop for the product, distribution channels, sales methods, competitors’ locations
Promotion—advertising and public relations, how to reach potential buyers, how competitors reach potential buyers, when, where and how to promote
Describing inbound and outbound marketing
Outbound marketing refers to any kind of marketing where the business initiates the conversation and sends its message out to potential customers. Examples of outbound marketing include cold calling, direct mail campaigns, email marketing, and door-to-door canvassing.
Inbound marketing attracts customers by creating content and experiences that connect to potential customers by providing content they are looking for. For example, providing a free guide that contains information consumers are looking for or asking and then answering questions in social media posts would be an example of inbound marketing.
e top 10 business-to-consumer marketing technique
Cause Marketing—Cooperation between a for-profit business and a non-profit organization to promote social and charitable causes
Direct Selling—Sales people build face-to-face relationships with customers
Co-Branding and Affinity Marketing—Two brands join together to promote a single product or service
Earned Media/Public Relations—Publicity not from advertising, like newspaper articles
Point-of-Purchase (POP) Marketing—Marketing that happens where products and consumers are located, for example product displays and on-product coupons
Internet Marketing—Marketing via the internet or email
Paid Media Advertising—Search engine advertising that is “pay-per-click”
Word of Mouth Advertising—Recommendations from users, including online reviews
Social Networks and Viral Marketing—Providing social media users with content they want to share
Storytelling—Telling a memorable tale of the company, what it does, how it solves problems, what it values, and how it contributes to the community
What is conspicuous consumption?
Buying goods and services not for their intrinsic value but to impress others in hopes of improving one’s social status.
Describe a Security deposit, an Eviction and a Sublet.
Security deposit- a sum of money kept by the landlord, usually equal to one month’s rent, during the term of the lease. When the lease ends this money is refunded if there is no property damage
Eviction- expelling a tenant from a property
Sublet- transferring a lease to another tenant
a down payment is usually around __% to __%
5% - 20%
Describe what Collateral, Lien, Default and Foreclosure is?
Collateral — Use of property to guarantee a loan.
Lien — Right of a lender to reclaim property
Foreclosure — Process in which a lender takes over a property when a borrower defaults on a loan.
Default — When a borrower fails to repay a loan
what is principal?
it is the initial money placed in an investment
whats the difference between simple interest and compound interest
Simple interest is calculated using the principal amount of a deposit. Compound interest is calculated using the principal amount AND the interest that has accumulated in earlier periods.
what is the simple interest formula?
interest = principal x rate x time
What are the risk, return, convenience and liquidity of certificates of deposit (CDs)?
Risks—The early withdrawal of funds involves a penalty and the saver must pay taxes on the interest earned.
Return–A longer term of deposit produces a higher return, and a higher initial investment often results in a higher interest rate. The return is predictable because the rate of return is fixed. Although the interest rate is relatively low, it is still higher than a savings account.
Convenience—The money is unavailable for a relatively long period of time. It also requires the investment of a minimum amount.
Liquidity—The saver cannot withdraw money when they want without a penalty or loss of interest.
What are the risk, return, convenience and liquidity of Money Market Accounts?
Risks—The rates are variable, so you never know the amount you will earn. There is no guarantee the price will increase. The saver must pay taxes on the interest earned.
Return—The return varies from day to day because there is no fixed interest rate, but money market accounts earn more than savings accounts.
Convenience—Money market accounts are convenient because most come with checkbooks. They do, however, require a certain minimum balance.
Liquidity—They are liquid because you can make a specified number of withdrawals each month.
What are the risk, return, convenience and liquidity of Savings accounts?
Risks—Some institutions charge fees if an account drops below a minimum balance, and the saver must pay taxes on the interest earned.
Return—The potential return is low because the interest rates are low.
Convenience—Savings accounts are convenient because the money can be easily withdrawn.
Liquidity—The money can be easily converted to cash.
What are the risk, return, convenience and liquidity of Stocks?
Risks—Stocks are volatile due to market ups and downs. Past performance does not guarantee future results, stocks may provide less income than other investments, and you pay taxes on the interest earned.
Return—Stocks offer the potential of significant growth and more stable returns, so they can increase in value over the long term. They generally perform better against inflation than other investments.
Convenience—While using a brokerage firm might not be very convenient, online trading can offer quick, convenient, and secure transactions once you find a reliable and legitimate online broker.
Liquidity—They are liquid, but may not be able to sell the bond for full price if other bonds are paying higher rates.
