Chp 4 A
: the amount of time, in months, that you’ll be making payments
Term
: failure to repay a loan on time
Default
money owed to another person or company
Debt
a savings account set up specifically to be used to cover financial emergencies
Emergency Fund
the percentage of principal charged by the lender for use of its money
Interest Rate
an asset that increases in value over time
Appreciating Asset
the original amount of a loan; the total amount borrowed before fees and interest
Principal
something owned (that has value) offered as security on a debt; if the debt is not repaid as agreed, the item is forfeited to the lender
Collateral
the persistent rise in the cost of goods and services over time
Inflation
: the measure of an investment’s profit or loss, usually expressed as a percentage of the initial investment
Rate of return
an asset that loses value over time, such as a car that’s worth less every year
Depreciating asset
the amount of time, in months, that you’ll be making payments
Term
a company that collects credit rating information and makes it available to creditors
the amount of interest charged on a debt but not yet collected; interest accumulates from the date a loan is issued
Accrued Interest
expense that occurs at various times throughout the year and tends to be in large, lump sums
Intermittent Expense
a lender who uses deceptive, unfair, or fraudulent practices on borrowers who are desperate for cash
Predatory Lender
the increase in value of a home over time; the difference between the amount owed and what the home could be sold for
Equity
a statistical number used to represent a consumer‘s creditworthiness
Credit Score
the average rate of growth for an investment over time; often expressed as an annual figure
Compound Growth
concept that an amount of money is worth more today than in the future due to earning potentia
Time Value of money
a legal claim (or right to own) against an asset until the debt (loan) is repaid
Lien
credit that automatically renews whenever a payment is made to reduce the debt
Revolving Credit
a loan for a fixed amount of money that‘s paid back in monthly installments
Installment Credit
: interest paid on interest previously earned
Compound Interest
a record that summarizes all of the income and outgo (spending) over a certain time period
Cash Flow statement