Personal Finance Vocabulary

Question 1

Salary

Answer 1

Fixed compensation paid regularly for services

Question 2

Gross income

Answer 2

All income derived from any source except for items specifically excluded by law

Question 3

Net income

Answer 3

The balance of gross income remaining after all allowable deductions and exemptions are taken

Question 4

minimum wage

Answer 4

The lowest wage paid or permitted to be paid

Question 5

overtime

Answer 5

Working time in excess of a standard day or week- the wage paid for working overtime

Question 6

ATM/Debit card

Answer 6

A card like a credit card by which money may be withdrawn or the cost of purchases paid directly from the holder’s bank account without the payment of interest

Question 7

credit card

Answer 7

a card authorizing purchases on credit

Question 8

Credit limit

Answer 8

The most money that a bank or business will allow a person to borrow

Question 9

Credit rating

Answer 9

A score or grade that a company or organization gives to a possible borrower and that indicates how likely the borrower is to repay a loan

Question 10

Account balance

Answer 10

A basic function usually provided by home banking programs by which a consumer can use a phone, personal computer or other electronic device to determine their balance of funds in a bank account

Question 11

principal

Answer 11

The unpaid balance on a loan, not including interest; the amount of money invested.

Question 12

interest

Answer 12

A fee for the use of money over time. It is an expense to the borrower and and revenue to the lender. Also money earned on a savings account

Question 13

debt

Answer 13

A state of being under obligation to pay or repay something in return for something received: a state of owing

Question 14

checking account

Answer 14

A bank account against which the depositor can draw checks

Question 15

Savings account

Answer 15

An account on which interest is usually paid and from which withdrawals can be made usually by only one presentation of a passbook or by written authorization on a prescribed form

Question 16

401(k)

Answer 16

A retirement account to which employee and employer contribute, on which taxes are deferred until withdrawal, and for which the employee usually selects the types of investments

Question 17

APR

Answer 17

The rate required by Truth in Lending Laws it is designed to show customers the total cost of credit, including the stated interest rate plus certain finance and service charges

Question 18

Mortgage

Answer 18

A conditional and temporary pledge of property to a creditor as security for the repayment of a debt