Vocabulary Week 8

Question 1

Annual Percentage Rate (APR)

Answer 1

the amount of interest spread over a year on a given financial plan

Question 2

Auto Finance Companies

Answer 2

a company that distributes on a loan for the purpose of buying new or used vehicles

Question 3

Balance Owed

Answer 3

the principal that the consumer is liable to pay to the lender or other financial institutions

Question 4

Bank

Answer 4

a financial institution that participates in deposits, withdraws and writing mortgages

Question 5

Bankruptcy

Answer 5

there are two types of bankruptcy: chaper 7 and chapter 13

Question 6

Chapter 13 Bankruptcy

Answer 6

the wages earners plan; divides the amount owed over 5 years

Question 7

Chapter 7 Bankruptcy

Answer 7

when all of the financial assets that are owed are tossed out

Question 8

Cash Advances

Answer 8

the ability to get cash instantly off of a credit card; typically have a higher interest rate and should be used with caution

Question 9

Charge Cards

Answer 9

a synonym for a debit, credit, or ATM card; these cards provide the ability to make a payment without cash

Question 10

Collateral

Answer 10

an asset that is used to be able to hold the loan; for instance, the company of which the car loan was received from uses the the car as collateral; synonymous with secure loan

Question 11

Consolidation Loan

Answer 11

a loan that combines multiple small loans into one big loan

Question 12

Consumer Credit Counseling Services

Answer 12

counseling services that are offered by banks and other financial institutions to help the consumer cope with their financial situations and make better decisions

Question 13

Short Term Goal

Answer 13

a finance goal that can be accomplished in a year or less

Question 14

Income

Answer 14

anything that is produced and adds monetary value to the consumer’s financial situation

Question 15

Intermediate Goal

Answer 15

a finance goal that is a bit longer than a short term goal but shorter than a long term goal

Question 16

Longterm Goal

Answer 16

a financial goal that would take over a year to accomplish

Question 17

Need

Answer 17

something that the consumer buys that is absolutely necessary

Question 18

Opportunity Cost

Answer 18

when you have to give up something in order to get what you actually want/ need

Question 19

Pay Yourself First

Answer 19

the idea that a consumer is to invest in their saving first before paying other parties

Question 20

Personal Income

Answer 20

income that is produced by the consumer for the consumer

Question 21

Interest

Answer 21

a percentage of money that is added to the original amount of the product/ service

Question 22

Rate

Answer 22

how fast your interest will grow

Question 23

Rules of 72

Answer 23

72 divided by the interest rate tells you how long it will take for your investment to double

Question 24

Checking Account Number

Answer 24

located at the middle bottom of a check and tell you which account the money belongs to

Question 25

Collateralized Loan

Answer 25

a loan that has an asset attached to it that can be repossessed if the loan is not paid