Unit 1

Question 1

Annual Percentage Rate (APR)

Answer 1

Cost of borrowing money on an annual basis; takes into account the interest rate and other related fees on a loan.

Question 2

Investments

Answer 2

Money put into an account intended for growth

Question 4

W2

Answer 4

Report sent from the employer to the employee, showing gross income, total taxes paid, and total voluntary deductions.

Question 5

W4

Answer 5

The form you fill out when you start a new job.

Question 6

Income tax

Answer 6

Tax paid to the state, federal, and local governments based on income earned over the past year.

Typically higher at the federal level.

Some states don’t have income tax at all.

Question 7

Assets

Answer 7

Money and other valuables belonging to an individual or business

Question 8

Liabilities

Answer 8

Debts that you owe

Question 9

Net worth

Answer 9

Total assets minus total liabilities

Question 10

Commission

Answer 10

An amount paid to an employee based on a percentage of the employee’s sales

Salespeople, real estate agents

Question 11

Royalties

Answer 11

A percentage of actual sales that a licensee pays to a licensor, usually anywhere from 5 to 15 percent (authors, songwriters)

Question 12

Estate tax

Answer 12

A tax on the estate, or total value of the money and property, of a person who has died

Question 13

Overtime

Answer 13

Hours worked beyond 40 hours, paid at 1.5x rate

Question 14

Gross pay

Answer 14

The total amount of an employee’s earnings before deductions are taken out

Question 15

Medicare

Answer 15

A federal program of health insurance for persons 65 years of age and older

Question 16

Associate’s Degree

Answer 16

2 year college degree from a community college, university, college, or technical school. The recipient of an Associate’s Degree can then transfer the credits toward a 4 year Bachelor’s Degree.

Question 17

Master’s degree

Answer 17

An advanced 2-year program completed after attainment of a bachelor’s degree.

Question 18

Student loans

Answer 18

Money borrowed to pay for education

Question 19

FAFSA

Answer 19

Free Application for Federal Student Aid

Question 20

Property tax

Answer 20

A tax on the value of a property

Question 21

Tuition

Answer 21

A sum of money charged for teaching or instruction by a school, college, or university.

Question 22

Taxes

Answer 22

Fees for the support of government required to be paid by people and businesses. Pays for things like roads, police, water fountains, welfare.

Question 23

Public college

Answer 23

A college operated and financially supported by the state in which they are located.

Question 24

Technical (vocational) colleges

Answer 24

Offer specialized training in a particular industry or career. Areas of study include the culinary arts, firefighting, dental hygiene, and medical-records technology. These colleges usually offer students certificates or associate degree programs.

Question 25

1040

Answer 25

A tax form filled out by an individual and filed with the IRS that determines the amount of income tax owed in a single year.

Question 26

Minimum wage

Answer 26

Lowest legal wage that can be paid to most workers

$7.25 national min. wage

As of January 1, 2025, Minnesota’s minimum wage will be $11.13 per hour for all employers, including small and large employers, youth, and J-1 visa workers. This is due to an adjustment for inflation.

Minneapolis/St. Paul is higher min. wage than the rest of the state.

Question 27

Sales tax

Answer 27

A tax on a sale of merchandise or services

No sales tax on clothing in MN

Question 28

Wage

Answer 28

An amount of money paid to an employee at a specific rate per hour worked.

Blue collar, hourly expression, can get overtime 1.5x compensation

Question 29

Salary

Answer 29

A fixed amount of money paid to an employee for each pay period.

Annual sum expression, NO OVERTIME

Question 30

Net pay

Answer 30

Amount of income left after taxes and deductions have been taken out.

Question 31

Social security

Answer 31

(FDR) 1935, guaranteed retirement payments for enrolled workers beginning at age 65; set up federal-state system of unemployment insurance and care for dependent mothers and children, the handicapped, and public health

Question 32

Human capital

Answer 32

The skills and knowledge gained by a worker through education and experience

Question 33

University

Answer 33

A collection of colleges, has undergraduate programs which award bachelor degrees and graduate program for masters’ degrees and doctorates.

Question 34

Bachelor’s Degree

Answer 34

4 year college degree from a university/college earned by completing undergraduate coursework and are awarded in specific concentrations.

Question 35

Community college

Answer 35

Type of college with up to 2-year programs leading to certificates, diplomas, or associate degrees.

Question 36

Annual Percentage Yield (APY)

Answer 36

The percentage rate expressing the total amount of interest that would be received on a $100 deposit based on the annual rate and frequency of compounding for a 365-day period.

Question 37

Collectibles

Answer 37

Items of personal interest to collectors that can increase in value in the future

Question 38

Insurance

Answer 38

Protection against possible financial loss due to an accident or routine health visits.

Question 39

Federal vs State Income Tax

Answer 39

Federal taxes fund the federal government
State taxes fund the government in your state - so the individuals who hold office in state governments decide where the taxes are used and how individuals are taxed.
Federal, state, and local taxes on income, both earned (salaries, wages, tips, commissions) and unearned (interest, dividends).

Question 40

Private college

Answer 40

A college that relies on endowments, tuition and fundraising campaigns. They do not receive government money.

Question 41

Special Focus Colleges

Answer 41

Some colleges focus on a specific interest or student population. Examples include: single gender colleges, religious colleges