Budgeting & Banking
What is the term for the total money someone gets to “take home” from a paycheck after taxes and deductions are taken out?
Net Pay
What do you call receiving a product or service now and paying for it later?
Credit
Which type of insurance provides income to people who depend on a wage earner after that person dies?
Life Insurance
What yearly tax information form does an employer provide to an employee showing how much was deducted from paychecks?
Form W-2
Which savings option from the guide must remain untouched for a fixed period of time and often pays a higher fixed rate?
Certificate of deposit (CD)
What is the name of the document you compare with your withdrawal records to track spending and ensure your records match the bank’s?
Check register
Which form do employers use to determine how much tax to deduct from an employee’s paycheck?
W-4
Which insurance helps pay for stays in a nursing home?
Long-term care insurance
Which tax amounts (like sales tax) are generally established by what levels of government?
State and local rates
What is the term used to describe interest earned on interest?
Compound interest
When opening a bank account, what piece of identification is commonly required?
Government-issued identification
Which type of loan is a credit card: installment loan or revolving credit?
Revolving Credit
What is the purpose of an umbrella insurance policy?
Protect the holder against liability costs beyond what is covered by other insurance
How can marriage status affect federal income tax for an individual?
Marriage status can change tax brackets and filing status, affecting bracket placement
Use the simple interest formula I=prtI=prt to calculate the interest earned on $150$150 after one year at 6% annual interest. (Show the numerical result.)
$9.00
What fee is charged if you spend more money than you have in your bank account?
Overdraft fee
Name two characteristics that describe bonds as an investment (from the study guide).
Investor loans money to a city, county government, or company.
Money is repaid after a certain date, plus interest is paid.
Generally considered a safe investment, although not insured by the FDIC
Which common practice can lower your car insurance rate rather than raise it?
Participate in a defensive driving course (This can actually lead to lower rates)
What is gross pay?
Gross pay is the amount of money received from a job before taxes or other deductions are taken out
What rule estimates how long it takes an investment to double in value?
The Rule of 72
Owned by members, who may vote and elect board of directors.
Explain why private mortgage insurance (PMI) might be required when getting a mortgage.
If an individual cannot make a large down payment
Give one reason bundling insurance might be beneficial and state the one exam-listed “EXCEPT” item (an option that is not an advantage).
Increases insurance options
When the federal government raises interest rates, which type of consumer account is generally impacted positively (i.e., typically earns higher returns)?
Savings account (higher interest rates typically increase returns on savings)
List two differences between stocks and traditional savings accounts based on the guide (consider risk and returns).
Stocks are risky ownership in a corporation with potential high reward and possible dividends; traditional savings accounts are insured (FDIC/NCUA), have the lowest interest rates, and limit withdrawals.