Section A: Personal Finance - Key terms Flashcards
Definition of interest rate:
The cost of borrowing money or the reward for saving money
Definition of debt:
Money owed
Definition of bankrupt:
An individual or organisation legally states its inability to repay debts.
Definition of solvent:
The ability to repay debts..
Definition of current account:
An account with a bank/building society designed for frequent use.
Definition of overdraft:
Withdraw money that isn’t in your current account.
Definition of expenditure:
Amount of money to cover all your costs.
Definition of shareholder:
Someone who invested in a company in return for equity.
Definition of saving:
Put money in a secure place to grow in value and use in the future.
Definition of investment:
Commitment to a business in hope it generates a financial reward in the future.
Definition of insurance:
Agreement with 3rd party to provide compensation against financial loss. Only if it is in line with the conditions and policies.
Definition of Premiums:
Regular payments made by an individual or business to an insurance firm in return for protection.
