Budgeting
Which of the following is considered a need and not a want?
a) food for a pet
b) an expensive car
c) jewerly
a) food for a pet
What is the difference between gross income and net income?
gross income - pay before taxes
net income - pay after taxes
True or False
The sticker price of a car is the price you should agree to pay for the car.
False
In your own words, what is a mortgage?
A loan that you take out for a house.
What is the formula for calculating interest?
I = P X R X T
What is a fixed cost?
an expense that stays the same.
If you work overtime and earn time and a half, what would we need to multiply by?
1.5
True or False
The dealer's cost is always cheaper than the sticker price.
True
What is the term for the initial amount of money you pay when buying a home?
Down Payment
What does the R stand for in our formula and how can we identify it in our word problem?
Rate - look for the percent sign! %
What is a variable cost?
an expense that can change.
How many hours/minutes did you work if you worked from 12:00pm to 3:30pm?
3 hours and 30 minutes
Which type of insurance protects against bodily injury (someone is actually getting hurt)
Liability insurance
What is the term for the additional cost we must pay for borrowing money?
Interest
Can you name one type of closing cost?
Credit Report
Loan origination
Attorney Fee
Abstract of title
Which of the following is considered a variable cost?
a) car payment
b) cable bill
c) groceries
c) groceries
What is an example of a job that earns commission?
real estate agent, car salesman/woman
What are the 3 parts of a sticker price that we must add together ?
Base price + options + destination charge
A house costs $180,000 and you must put a down payment of 20%. How should we find the down payment?
(Do not solve, just explain the steps)
convert 20% and multiply 180,000
What two things does our monthly payment help to pay off?
1. interest
2. principal
What is an annual expense (looking for the definition, not an example)?
an expense that usually only needs to be paid once a year
Which type of tax is used to help pay for retirement and disability benefits ?
a) federal income tax
b) social security tax
c) medicare tax
social security tax
The insurance company will pay up to $50,000 to any ONE person injured.
What is the formula for finding the monthly payment for a house? *Hint* It was the only formula you had to remember from your last quiz
amount of mortgage divided by 1000 times the number in the chart
Explain how you would calculate the following 3 steps:
Step 1: Find the interest.
Step 2: Find the payment to the principal
Step 3: Find the new principal
Step 1: Use the interest formula
Step 2: Use subtraction. Subtract the monthly payment and the answer from step 1.
Step 3: Use subtraction again. Subtract the original principal with the answer from step 2.