Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Personal Finance > Review Sheet > Flashcards

Review Sheet Flashcards

1
Q

Home Equity Loans

A

involves a set amount of money loaned over a set amount of time up to as long as 15 years
guy wants to buy boat so he takes loan out and secures it with a second mortgage on home

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Do borrowers get tax deductibility with home equity loan?

A

yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is simple interest?

A

interest that is paid only on the initial amount of the deposit


How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is discounted interest?

A

when interest is computed and then subtracted from the principal with the remainder being disbursed to the borrower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is add-on interest?

A

calculating interest by computing finance charges on the original loan balance and then adding the interest to that balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Consumer debt ratio

A

luyfgljb

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Consumer loans?

A

loans made for a specific purpose using formally negotiated contracts that specify the borrowing terms and repayment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Types of consumer loans

A

auto loans, loans for durable goods, education loans, personal loans, consolidation loans

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Options for have debt?

A

bankruptcy, debt consolidation, debt settlement,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

different types of cards?

A

credit, debit, charge, prepaid, store card, credit builder cards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What are the 5 C’s of credit

A

Character- borrowers reputation

  • Capacity - borrower’s ability to repay a loan by comparing income against recurring debts
  • Capital - The lender will consider any capital the borrower puts toward a potential investment
  • Collateral - helps to secure the loan
  • Conditions - the interest rate and amount of principal
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Adjustable rate mortgages?

A

a mortgage whose rate of interest is adjusted periodically to reflect market conditions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Fixed Rate mortgages?

A

A fixed-rate mortgage (FRM), often referred to as a “vanilla wafer” mortgage loan, is a fully amortizing mortgage loan where the interest rate on the note remains the same through the term of the loan, as opposed to loans where the interest rate may adjust or “float”.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Other types of mortgages?

A 
fixed-rate mortgages
Adjustable rate mortgages
interest only mortgages
graduated payment mortgages
growing equity mortgages
biweekly mortgages
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

how do lenders increase the yield of their loans?

A

jhfhkd

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Requirements to “dip” into IRA account?

A

It applies to your very first home purchase, of course, but it also applies if you or your spouse haven’t owned a principal residence at any time during the past two years. The operating word here is ‘principal’, because even if you’ve owned a vacation home during that time, the exemption can still apply.
Also, you yourself don’t have to be the homebuyer. You can also qualify for the exemption if you’re helping your spouse, child, grandchild or parent buy a home.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is a condominium?

A

a building or complex of buildings containing a number of individually owned apartments or houses.

18
Q

What is a cooperative?

A

Co-ops are not considered real property. When you buy into a co-op, you become a shareholder in a corporation that owns the property.

19
Q

What is a single family home?

A

A single-family detached home, also called a single-detached dwelling, single-family residence (SFR) or separate house is a free-standing residential building. It is defined in opposition to a multi-family residential dwelling.

20
Q

What are the ongoing costs of owning a home?

A

property insurance
Maintenance
Property taxes
interest opportunity costs

21
Q

What to look for in a rental agreement?

A 
Is it a fixed-term or month-to-month tenancy?
rent
fees
deposits
pets
features
water/waste
22
Q

Advantages of buying a new car

A

Reduced maintenance expense
Warranty coverage
Roadside assistance

23
Q

Advantages of buying a used car

A

Improved reliability

less expensive

24
Q

What are liquid assets?

A

An asset is said to be liquid if it is easy to sell or convert into cash without any loss in its value

25
Q

What accounts are most useful for maintaining liquid assets?

A 
Any cash you have
Funds in your checking account
Funds in your savings account
Funds in a money market account
Certificates of Deposit
Mutual Funds
Stocks
Bonds
26
Q

Where does the government and state get most of their funds?

A

Federal- income tax
State- income and sales tax
Local- property tax

27
Q

What class taxpayer pays the highest taxes?

A

middle class

28
Q

What controls does the government use to control the financial planning environment?

A

,jg.kdshf.ksfdksfj

29
Q

How do itemized deductions work?

A

An itemized deduction is an eligible expense that individual taxpayers in the United States can report on their federal income tax returns in order to decrease their taxable income

30
Q

How do standard deductions work?

A

The standard deduction, as defined under United States tax law, is a dollar amount that non-itemizers may subtract from their income and is based upon filing status.

31
Q

What is the difference between itemized and standard?

A

Standard deduction is a specific dollar amount that you can deduct from your income to reduce your taxable income

Itemized deductions, on the other hand, are expenses which one can list if these expenses belong to a predetermined list of allowable items.

32
Q

Where can one get advice for preparing their tax return?

A

fluyglgl

33
Q

How does the social security system work?

A

The program is based on contributions that workers make into the system. While you’re employed, you pay into Social Security; you receive benefits later on, when it’s your turn to retire. Contributions take the form of the Federal Insurance Contributions Act (FICA) taxes that are withheld from most paychecks.

34
Q

What is a budget?

A

Simply put, a budget is an itemized summary of likely income and expenses for a given period

35
Q

Whats the reasoning behind having a budget?

A

It’s an invaluable tool to help you prioritize your spending and manage your money—no matter how much or how little you have.

36
Q

How is a budget prepared?

A

Typically it is prepared through a spreadsheet and you have to take into account your income, bills, and regular expenses. From there, you can determine how much spending money you have and how much you can budget

37
Q

What are the 3 basic financial planning documents used by individuals and families?

A

Short term goals
long term goals
spending history

38
Q

What is a measure of satisfaction that one gets from spending money?

A

utility

39
Q

What does propensity mean?

A

an inclination or natural tendency to behave in a particular way.

40
Q

How is propensity used in financial planning?

A

Generally, as income rises, the average propensity to consume decreases

Personal Finance (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions