avid finance Flashcards
(18 cards)
What is salary?
Compensation received by an employee for their work
Salary is typically expressed as an annual figure.
Define gross income.
Total earnings before any deductions
Includes wages, bonuses, and other sources of income.
What is net income?
Earnings after all deductions have been made
Often referred to as take-home pay.
What is the minimum wage?
Lowest legal hourly pay for workers
Varies by location and is subject to change.
What does overtime refer to?
Hours worked beyond the standard workweek
Typically paid at a higher rate than regular hours.
What is the purpose of an ATM/Debit Card?
Allows access to bank accounts for withdrawals and purchases
Directly deducts funds from a checking account.
Define credit card.
A card that allows borrowing funds up to a certain limit
Users are expected to repay borrowed amounts with interest.
What is a credit limit?
Maximum amount that can be borrowed on a credit card
Set by the credit card issuer based on the borrower’s creditworthiness.
Define credit rating.
Assessment of a borrower’s creditworthiness
Usually represented as a score.
What is account balance?
Current amount of money in an account
Can be positive or negative depending on transactions.
Define principal in finance.
Initial amount of money borrowed or invested
Excludes interest or profits.
What is interest?
Cost of borrowing money or earnings from an investment
Expressed as a percentage of the principal.
What does debt refer to?
Amount of money borrowed that must be repaid
Can include loans, credit card balances, and mortgages.
What is a checking account?
Bank account for daily transactions and payments
Typically allows unlimited deposits and withdrawals.
Define savings account.
Account for saving money and earning interest
Generally has limited withdrawal options.
What is a 401(k)?
Retirement savings plan sponsored by an employer
Allows employees to save a portion of their paycheck before taxes.
What does APR stand for?
Annual Percentage Rate
Represents the yearly interest charged on borrowed money.
Define mortgage.
Loan specifically for purchasing real estate
Secured by the property itself.
