Midterm Study Guide - FinLit

It is better to receive compound interest than pay it.

• Yes
• No
• Maybe

Simple interest is calculated on

• principal
• principal + interest

Compound interest is interest that is paid (or received) on

• principal only
• principal + interest

Interest is a sum paid or charged for the use of money or for borrowing.

• True
• False

The amount borrowed (I sometimes say the original amount of the loan) is

• principal
• optimal
• oatmeal
• lender

A loan to purchase a house and/or land is known as a

• mortgage
• lender
• principal

Person or company who loans money

• Lender
• Principal
• Mortgage
• Borrower

The form you receive at the end of the year from your employer that shows all of your income and deductions for the whole year is

• Form W-2
• Form W-4
• Form W-3
• Form G-4

The type of bank account that allows you to write checks but also receive interest if you maintain a minimum balance is

• money market
• CD
• checking account
• savings account

The form you fill out at the beginning of your employment that lets your employer know how much state taxes to hold from your check is

• W-4
• G-4
• W-2
• G-2