Paychecks and Taxes
What is the money you "take home" after taxes called? Hint: "You scoop it up in your ___"
Net Pay
What form of identification do you need to open a bank account?
Just a government ID like a permit, driver's license, passport, etc.
What type of insurance pays when someone dies?
Life Insurance
What is a CD?
Money must stay for a set time. In a CD, you put the money in it and it has to stay there untouched for a period you select. It grows a lot more interest than in a savings account! You can access the money for a large fee, however.
For example, Mike has a CD with Metro Bank. He has $10,000 in this account at a 4.95% interest rate. At this rate, Milke will have a total of $10,045 after one year. For comparison, regular savings accounts usually only have an interest rate of 0.5%.
What is it called when you use now/borrow, pay later?
Credit
What form tells employers how much tax to take out?
W-4
What additional cost is paid when buying something in a store?
Sales tax
What insurance covers short-term illness, doctors' visits, accidents, etc.?
Health Insurance
What is compound interest?
Interest on interest, earning more money.
What is it called when one party breaks a contract?
What is it called when one party breaks a contract?
What form shows what was deducted in a year?
W-2
What does APR stand for?
Annual percentage rate - Credit card interest rate yearly
What loan type helps first-time buyers with low credit? Hint: backed by a higher-up institution
Government-insured loan
What is the Rule of 72?
The Rule of 72 is a simplified formula used in finance to estimate how long it will take for an investment to double; time for investment to double
Who can confirm signatures on a contract?
Notary public
What is Gross Pay?
It's gross to think you could take home this much but you don't! Money or pay before taxes are taken out.
Describe how a debit card is different from a credit card.
A debir card is alinked to a checking account and takes money instatntly. A creduit card is borrowed money that you pay a bill on later.
For example. Miss Rice goes to the grocery store. She buys $25 worth of groceries using her debit card. that money is taken out of her account instantly. Then she goes next door to a clothing store and spends $100 on her credit card. At the end of the month (or whenever you pay a credit card bill), she'll pay the $100.
What is escrow? When is it used? Hint: used when buying something large, a big purchase
A financial process used when two parties take part in a transaction, and there is uncertainty about the fulfillment of their obligations
Used in home buying for when a house is still pending and the buyer is being qualified and looked into to make sure they actually can buy the home
What are bonds?
Loans to city/company with repayment plus interest. The company or government (like war bonds) will repay you your investment plus interest!
What happens if you spend more than you have?
Overdraft Fee
Who sets sales tax rates?
The government
What is an overdraft fee?
A bank fee is charged when you spend more than you have or when an account goes below 0 dollars. Some accounts don't have these, which is great.
What kind of loan is NOT an installment loan?
Options for answer: Credit card, car loan, mortgage, student loan.
A credit card is a form of loan and is not installment-based, like a student loan, car loan or mortgage, where you pay a set amount over a certain period of time.
What are stocks?
Ownership in a corporation, risky investment but can pay off.
What is layaway?
Pay little by little, get the item later.
For example, if I go to Walmart and put a sectional couch on layaway, I can pay little by little until it is paid off, then take it home. This has become more unpopular DUE TO credit cards becoming more available and used.