3rd 9 Weeks Review

Which one of the following terms is an organized spending plan for one's money?

• Budget

• Bankruptcy

• Cost System Analysis

• Profit and Loss Statement

What is the difference between credit and debit cards?

• debit cards loan you money and credit card show that lenders trust you

• debit cards make bigger profits for the banks than credit cards so they are used to target college students for profit

• credit cards lend you money and have a monthly bill; debit cards allow funds to be withdrawn automatically from your checking account

• debit and credit cards are the same because they lend money to those who use them

What will happen if you take money out of a CD, Certificate of Deposit, before maturity?

• You will face greater risk of losing all your principal lump sum if you withdraw

• You will receive a higher return on money withdrawn

• You will pay a penalty to the bank for early withdrawal of your money

• You will get a higher rate of return, over 10%, so long as you only withdraw the money after 24 months

Why is there a difference between interest charged and interest earned by banks?

• So banks can operate profitably

• So banks can operate in the interests of their members without excessive profit

• So interest rates in the economy are aligned and not subject to violent changes

• So banks can help those who borrow and punish those who lend

What is the Annual Percentage Rate, APR?

• the rate at which interest is compounded throughout the year

• the rate at which people who are comfortable with high risk can borrow money

• the rate banks charge other banks for inter-bank loans

• the rate at which people with low credit scores can borrow money

Why should title pawn loans be avoided, if possible?

• You could potentially lose your vehicle if the loan is not paid back

• you might gain collateral, but you will also find the return low

• the interest rates are low, but the risks of defaulting are high

• you might potential find yourself in debt because they are difficult to earn money from

What will occur if you only pay the minimum on your credit card each month?

• you will end up paying the greatest finance charge for that use of credit

• you will pay off your credit card as quickly as possible

• you will never paid off any of the principal because your interest rate goes down

• you will receive more and more credit applications because you are just the type of person credit card companies hate

Your paycheck BEFORE taxes/deductions are taken out

• disposable income

• zero based budge

• gross pay

• net pay

Your paycheck AFTER taxes/deductions are taken out

• budget

• disposible income

• gross pay

• net pay

Which of the following IS NOT a mandatory deduction taken out of your paycheck?

• state taxes

• federal taxes

• FICA Social Security and Medicare

• health insurance