Chapter 1-4 Test

Question or Hint Answer or Word
  1. Personal Finance All of the decisions and activities of an individual of family regarding their money, including spending, saving, budgeting, etc.
  2. Loan A debt evidenced by a "note," which specifies the principal amount, interest rate and date of repayment (ex: house mortage)
  3. Debt An obligation of repayment owed by one party (debtor/borrower) to a second party (creditor/lender)
  4. Credit The granting of a loan and the creation of a debt; any form of deferred payment
  5. Interest A fee paid by a borrower to the lender for the use of borrowed money
  6. The Five Foundation The five steps to financial success
  7. Interest Rate A rate which is either charged (on debt) or paid (on investment accounts) for the use of money
  8. Emergency Fund A saving account that is set aside to be used only for emergency expenses
  9. Inflation The persistent increase in the cost of goods and services or the persistent decline in the purchasing power of money
  10. Sinking Fund Saving money over time for a large purchase
  11. Credit Report A detailed report of an individual's credit history
  12. Depreciation A decrease or loss in value
  13. Debt Snowball Preferred method of debt repayment; includes a list of all debts organized from smallest to largest balance; minimum payments are made to all debts except for the smallest' which is attacked with the largest payment
  14. Credit Score A measure of an individual's credit risk; calculated from a credit report using a standardized formula
  15. Credit Card Type of card issued by a bank that allows users to finance a purchase

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