FAB VOCAB
This type of interest rate stays the same throughout the entire loan term
What is a fixed interest rate?
A type of loan that is NOT backed by collateral
What is an unsecured loan?
Taking on this type of loan is highly discouraged by financial advisors AND Ms. Bedenbaugh
What is a payday loan?
This is the formula for simple interest
What is I=PRT?
This is the formula for compound interest
What is A=P(1+r/n)nt ?
The number that represents your "creditworthiness" to creditors
What is your Credit Score?
What is an Individual Retirement Account (IRA)?
This is a rule that designates how much (%) of your income to spend in each category
What is the 50/30/20 Rule?
This is what EACH of the variables in the simple interest formula represent (you must put ALL OF THEM) (Hint: You should have 4)
What is I=Interest, P=Principle, R= Interest Rate as a decimal, T= Time in years?
This is what EACH of the variables in the compound interest formula represent (You must put ALL of them) (Hint: There are 5)
The yearly cost of borrowing, including interest and fees.
What is Annual Percentage Rate (APR)?
This type of account is designed for saving money, and generally offers interest on the balance
This is how much of a balance you should carry month to month on a credit card
What is ZERO DOLLARS?
Jeremy earns 5% interest on his savings account. If he starts with $5000, this is how much he will have TOTAL after 4 years
What is $6,000?
Bristol has an account where she makes 5% interest compounded quarterly. If she starts her account with $2,000, this is how much she will have in the account after 5 years.
What is $2,564.07?
A short-term, high interest loan that often creates cycles of debt?
What is a payday loan?
These are typically used to pay for educational expenses
What are student loans?
This is what you should do if you have MULTIPLE loans with high interest rates
What is debt consolidation?
Cam has a savings account but can't remember how much interest he makes on the account. He started with $300, and after 1 year he has $320. This is his interest rate.
What is 6.6%?
Kennedy has an account where she earns 3.5% interest compounded monthly. If she starts with $17,000, this is how much will she have after 10 years.
What is $24,111.86?
What is a prepayment penalty?
What is a Certificate of Deposit (CD)?
This is how you get a lower interest rate if you are taking on a loan, such as a car payment
What is a shorter loan term?
What is 37.5 years?
Amari is deciding if he will have enough money ($10,000) to open his own business. His account has $9,000 at the start, and the account terms are 2.5% compounded semiannually. If he waits 5 years, this is how much he will have in the account and he (CAN OR CANNOT?) start his business.
What is yes he can, he will have $10,190.43?