LEI Lesson 1 - Why Save?

Front

Spending by households on goods and services is the definition of:

Back

consumption

Front

Money received for work performed or from investments is the definition of:

Back

income

Front

The original amount of money invested or lent is known as:

Back

principal

Front

The act of consuming less than disposable income and setting the remainder aside is called:

Back

saving

Front

Interest paid on the initial investment only is known as:

Back

simple interest

Front

The mathematical rule used to approximate the number of years it will take for an investment to double in value is called:

Back

Rule of 72

Front

Money a person has left to spend or save after taxes and other required deductions is called:

Back

disposable income

Front

Interest paid or earned on principal and on interest previously earned.

Back

compound interest

Front

Which of the following is a good reason to save? Because the government collects high rates of taxes on interest received., Because one has to go to the bank to make a purchase., Because your parents will place $1 in your savings account for every $1 you save., Because the bank charges a penalty if you withdraw money from your account.

Back

Because your parents will place $1 in your savings account for every $1 you save.

Front

Which of the following is the best definition of saving?
Options:
Putting money under your mattress.
Disposable income minus consumption spending.
The discount received from buying something on sale.
The interest paid on a savings account.

Back

Disposable income minus consumption spending.