Finance Flashcard

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What is identity theft?

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Identity theft is the act of obtaining and using someone else's personal information, such as their name, Social Security number, or credit card information, without their permission, typically for financial gain.

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How can you protect yourself from identity theft?

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You can protect yourself from identity theft by regularly checking your bank statements to verify that all transactions are accurate.

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What is compound interest?

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Compound interest is the interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

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If you invest $1000 at 1% annual compound interest for 10 years, how much will you have?

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You will have slightly more than $1100.

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What is the difference between a student loan and a scholarship?

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Student loans need to be repaid, while scholarships and grants are forms of 'gift aid' that do not need to be repaid.

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What is a W-4 form?

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A W-4 form is a tax form that employees fill out to indicate their tax situation to their employer, which helps determine the amount of federal income tax to withhold from their paycheck.

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What is a W-2 form?

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A W-2 form is a tax form that employers send to employees and the IRS, detailing the employee's annual wages and the amount of taxes withheld from their paycheck.

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What information is typically found in a credit report?

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A credit report typically includes your credit payment history, the average age of your credit accounts, and the total number of active credit accounts.

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What information is NOT found in a credit report?

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Your checking account balance history is not found in a credit report.

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What is the purpose of a savings account?

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The purpose of a savings account is to save money while earning interest on the deposited funds.