Finance Basics
What is money you earn after all expenses are paid?
Profit
What is an agreement that allows you to borrow money now and pay it back later?
Credit
What is a plan that tracks expected income and expenses?
Budget
What is money put into a business expecting future profit?
Investment
You take out a $5,000 loan for new equipment. What is the amount you borrowed called?
Principal
What is money borrowed that must be repaid, often with interest?
Loan
What is an asset pledged as security for a loan?
Collateral
What is it called when your actual expenses are higher than your planned budget?
Budget overrun
Investing in better equipment may raise what long-term measure?
Productivity or Profit
You sell farm produce for $2,000 and your costs are $1,200. What’s your profit?
$800
What is the cost of borrowing money, expressed as a percentage?
Interest
What is the schedule or plan for paying back borrowed money?
If your business earns $10,000 and spends $7,000, what is your profit?
$3,000
What kind of investment involves putting money into another’s business for shared profit?
Partnership Investment
You have a $2,535 monthly income and $700 in expenses. What’s your net income?
$1,835
What is the total amount of money left after paying all costs, taxes, and deductions?
Net Income
If a borrower fails to repay a loan, what might the lender take?
The Collateral
What is the difference between total income and total expenses in a business?
Net Income
Name one risk of investment in agribusiness.
Market prices, weather, demand, or production costs
You borrow $3,000 with 5% interest and must repay in 1 year. How much total will you repay?
$3,150