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Everfi Test
| Question | Answer |
|---|---|
| Checking Account | allows you to make deposits or withdrawals using an ATM, debit card, or personal check |
| Savings Account | allows a safe place for your money and make interest on your money, your access if more limited than a checking account |
| Certificates of Deposits (CDs) | deposits held by the bank for a specific amount of time and earned a fixed interest rate (higher) |
| Difference btwn Demand and Time Deposits? | Demand has liquidity, time doesn't |
| Diff btwn banks and credit unions | banks - offer direct services to individuals and businesses, pays taxes, higher interest (out to make a profit) credit unions - owned by their members, offer credit at a low rate, don't pay taxes (not for profit) |
| defer | to delay/postpone payment |
| Credit Card Interest | interest you pay on money you owe on a credit card; borrowing money and interest is the fee to borrow it |
| Compound Interest | interest generated from money you put into the account and interest you make on that money (interest on your interest) only on accounts where you're earning interest like CDs and not credit cards |
| Annual Percentage Rate (APR) | single percentage that represents yearly cost of funds over there term of a loan (credit card interest for a year) |
| Credit Score | a numerical rating of your credit worthiness - how likely you are to pay off your debts (credit history, how much you borrow, percentage of credit you're using, late payments, etc) -employers, banks. landlords look at it |
| FAFSA (Free Application for Student Aid) | main form students use to apply for fed education grants and loans. based on financial income, marital status, and type of school you're planning to attend (everyone should fill it out when going to college) |
| Purpose of Consumer Protection Laws | prevent identity theft, fraud, false advertising, credit card companies rising interest w/o your knowledge, deceptive marketing techniques |
| mutual funds | collection of investments that you can buy as a single package rather than purchasing ind stocks, bonds, and other investments by yourself. Investors buy shares of it then use the $ to buy investments that go in the fund |
| stocks | share of ownership in a company - own a piece of a company. some stocks pay dividend (company's profit divided up and shared among all stockholders) company's market capitalization - total value of all stocks |
| budget | plan of how you'll spend the money you receive |
| diff btwn financial instutions | retail - deal w/ ind customers & small businesses commercial - deal w/ deposits & loans from corporations or large businesses credit unions - privately owned & controlled by its members savings and loans - do not offer loans to commercial banks |
| FDIC (federal deposit insurance corporation) | insures deposits at the bank that have purchased the coverage |
| Appreciation vs Depreciation | Appreciation - increase in value (House) Depreciation - decrease in value (Cars) |
| Scholarships, grants vs loans | S & g - given to students to help pay for their edu and don't have to be repaid l - have to be repaid and have interest |
| mortgage | type of loan used to finance the purchase of real estate |
| diff btwn fixed and adjustable mortgage rates | fixed - interest is set when you take out the loan and will not charge it adjustable - interest rate may go up and down |
| relationship btwn edu and potential income | higher education equals more potential income. the more schooling you do, the more you get paid |
| what do taxes pay for and provide | social security, health care, national defense, social services, public schools, highways, interstates, state employees, libraries, or anything else public |
| diff btwn good and bad debt | good- that will help your wealth grow if u go into debt over it (house, land, student loans) bad - borrowing money to buy things that are unlikely to retain their value and not pay back (credit cards and cars) |
| Pros and cons of renting | renting - sign a lease & agree to pay monthly rent pros - no maintenance, easy to leave, don't have to sell cons - can't have pets, must follow agreement, have to stay for agreed time |
| Pros and cons of owning | owning - you own the house but bank can take it if you don't pay bills pros - can do whatever you want, cons - bills, maintenance, mortgage |
| Why is health insurance impt? | you'll have to pay money for all your health problems if you don't have it and the money adds up -transfer the risk onto someone else |
| Other insurance types? | auto, life, homeowner's, renter's |
| diff btwn credit and debit cards? | credit - borrow the money (type of loan) debit - money comes straight from your bank |
| Pros and cons of credit cards? | pros - deferred payment cons - interest, debt |
Created by:
_xokayleighxo_
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