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Financial Algebra > Vocabulary (Semester 2) > Flashcards

Vocabulary (Semester 2) Flashcards

1
Q

Employment Agencies

A

Businesses that assist in the job finding process and require a fee paid when employment is found

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2
Q

Semimonthly

A

Collecting payment twice a month (n=24)

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3
Q

Monthly

A

Collecting payment every month (n=12)

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4
Q

Bi-Weekly

A

Collecting payment every other week (n=26)

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5
Q

Weekly

A

Collecting payment every week (n=52)

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6
Q

W-4 Forms

A

Forms completed by employers that calculate how much of the taxes you pay they need to withhold

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7
Q

Piecewise Function

A

Set of equations that work together and build off of each separate calculation

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8
Q

Overtime Pay

A

The rate employers pay their employees when they work over 40 hours a week (usually 1.5 times their regular earnings)

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9
Q

Commission

A

A percent of the product’s profit is received by the salesperson

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10
Q

Royalties

A

The sum of money paid for the use of a product to the developer (which in turn publicizes their work)

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11
Q

Piecework Wages

A

Money is earned based on product production

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12
Q

Pension

A

Type of deferred compensation that is collected annually based on average salaries, years worked for the company, and a multiplier

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13
Q

Social Security

A

Type of federal tax that forces employers to withhold 6.2% of wages up to a yearly cap that is later collected during retirement

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14
Q

Medicare

A

Another federal tax that assists seniors and those with disabilities in old age; employers only withhold 1.45% of wages

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15
Q

Payroll Taxes

A

Social Security and Medicare taxes that show up on paystubs

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16
Q

Income Taxes

A

Tax deducted from gross income based on where the individual falls in the tax bracket

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17
Q

Gift Tax

A

40% paid on gifts of $14,000 or greater

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18
Q

Excise Tax

A

Small taxes on cigarettes and alcohol to discourage unhealthy habits

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19
Q

Sales Tax

A

Percent of the price paid for goods/services

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20
Q

Property Taxes

A

Taxes paid on property that funds local police, schools, and parks

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21
Q

Estate Tax

A

Tax on estates over $5.34 million when the owner passes away

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22
Q

Regressive Tax

A

Levies the same percentage on products purchased regardless of the buyer’s income (those with a lower income end up paying larger portions of their income in these taxes)

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23
Q

Proportional Tax

A

Applies same tax rate to all individuals regardless of income

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24
Q

Progressive Tax

A

When the percentage levied is bracketed so that a taxpayer only pays the higher rate on the difference of their income from the last step’s max amount

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25
Q

Gross Pay

A

The total pay an employee earns before taxes

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26
Q

Net Pay

A

The employee’s take-home pay after tax deductions

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27
Q

Form W-2

A

A compiled representation of the employee’s year to date (YTD) tax deductions which is used to submit federal, state, and local taxes

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28
Q

Cafeteria Plan

A

Section 125 allows employees to hold back portions of their pre-tax wages for medical/childcare insurance

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29
Q

Flexible Spending Account

A

An account that holds pre-tax money to be used in specific areas and reduces taxable income

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30
Q

Form 1099

A

Representation of a taxpayer’s other sources of income besides wages, salaries, and tips (usually includes interests, stocks, commissions, and royalties)

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31
Q

Form 1040 EZ

A

The simplest form used for no deductions

32
Q

Form 1040 A

A

A form simpler than 1040 and includes deductions and dependents status and benefits

33
Q

Exemption

A

A reduction in your taxable income for each individual that you claim as dependent on your income

34
Q

Standard Deduction

A

A basis deduction based on filing status

35
Q

Tax Deduction

A

Factors that can reduce the taxable income

36
Q

Tax Credit

A

Directly reduces tax (money paid forward from the previous year)

37
Q

Itemized Deductions

A

Personal spendings that can qualify for tax deductions (disaster loss, property tax, mortgage interest, charitable donations); outlined by Schedule A

38
Q

Tenant

A

The person renting a place (living there)

39
Q

Landlord

A

The person renting out the property (owner)

40
Q

Lease

A

A written agreement between tenant and landlord detailing the amount of rent owed and length of the rent

41
Q

Application Deposit

A

The amount (sometimes refundable) for processing the rental application

42
Q

Security Deposit

A

The money owed to protect the landlord from damage repair; refunded to the tenant if no damage is present

43
Q

Apothem

A

The distance from the middle of a regular polygon to any midpoints of its sides

44
Q

British Thermal Units (BTUs)

A

Units used to calculate the size of an AC that can successfully cool a room

45
Q

Market Value

A

How much a house is priced at

46
Q

Assessed Value

A

Value of the home assessed by a type of realtor that takes into account your assets and modifications

47
Q

Mortgage

A

Home loan

48
Q

Forclosure

A

When a house payment is not made (on time) so the person is evicted from the property

49
Q

Escrow

A

Separate fund set aside for house payments

50
Q

Front End Ratio

A

Monthly Housing Expenses/Monthly Gross Income must be less than or equal to 28% to be approved for mortgages

51
Q

Back End Ratio

A

Total Monthly Expenses/Monthly Gross Income must be less than or equal to 36% for loan approval

52
Q

Balloon Mortgage

A

When the monthly payment schedule for a home loan starts out low with a large final payment

53
Q

Interest-Only Mortgage

A

Requires small payments of interest until the last payment which pays off the entire loan all at once

54
Q

Closing

A

Meeting between buyer, seller, and attorneys when the house is actually sold

55
Q

Earnest Money Deposits

A

Money paid by the interested buyer to show the commitment to the sale

56
Q

Attorney Fees

A

Paid to attorney’s representation at closing

57
Q

Origination Fees

A

Fees for loan paperwork

58
Q

Prepaid Interest

A

Money accrued throughout the month that will cover the time from closing to the next payment due date

59
Q

Transfer Tax

A

Charge for transfer of the title of ownership

60
Q

Amortization Table

A

A table breaking down how much of the monthly mortgage payment will go towards the principal vs the interest

61
Q

Maintenance Fee

A

Costs for maintaining the place you are renting that can go towards landscaping/repairs

62
Q

Cooperative

A

When each person owns a part of the property

63
Q

Equity

A

When the value of an asset is more than what you are paying (subtracting liabilities from the value of assets)

64
Q

Traditional IRA

A

An individual retirement arrangement that is tax-deferred, meaning that income taxes are paid upon withdrawal (including the interest)

65
Q

Roth IRA

A

An individual retirement arrangement that is tax-exempt, meaning that the money deposited is taxed and no tax is required upon withdrawal; can withdraw the entire investment penalty-free but NOT the growth

66
Q

Social Security Credit

A

“Points” earned from income that determine SS benefits later in life; can only earn up to 4 credits each year

67
Q

Single Life Annuity

A

Life insurance that has higher monthly payments but is only paid to the policyholder

68
Q

Qualified Joint and Survivor Annuity

A

Life insurance policy with lower monthly payments that are paid to the person earning the pension OR their designated survivor if they pass away

69
Q

Lump-Sum Payment

A

Collection of total pension funds at a single time (life insurance)

70
Q

Vesting

A

Outlined formula per place of employment that details what percentage of the pension an individual will earn based on years worked

71
Q

Beneficiary

A

The person chosen by the policyholder that receives life insurance benefits

72
Q

Premiums

A

The amount paid for the policy

73
Q

Term Life Insurance

A

Provides protection for a specified period of time

74
Q

Level Term Insurance

A

The death benefit is the same over the entire term of the policy

75
Q

Permanent Life Insurance

A

Lifetime coverage up until a specified age that is usually combined with investment accounts

76
Q

Face Value

A

The amount of coverage that a policy provides

77
Q

Cash Value

A

The investment portion of a life insurance policy

Financial Algebra (4 decks)

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