Financial Vocabulary

Front

How many work hours are in a full-time work year?

Back

2,080

Answer explanation

In a full-time work year, the standard calculation is 40 hours per week multiplied by 52 weeks, which equals 2080 hours. Therefore, the correct answer is 2080 work hours.

Front

Mary earns $15.50 per hour. Calculate her total gross pay for a year if she works full-time.

Back

$32,240

Answer explanation

To calculate Mary's total gross pay for a year, multiply her hourly wage by the number of hours worked in a year. Assuming full-time is 40 hours per week for 52 weeks, her gross pay would be $32,240, not 0.

Front

What is the amount before all deductions on a paycheck called?

Back

Gross Income

Answer explanation

The enchanting amount before deductions is called Gross Income. It represents the total earnings before any taxes or other deductions are applied, distinguishing it from Net Income, which is the amount received after deductions.

Front

Simone is excitedly reviewing her paycheck and notices several deductions. What exactly are deductions?

Back

All reductions from gross pay, such as required taxes and some voluntary such as health insurance, before an employee is paid.

Answer explanation

Deductions are all reductions from gross pay, including taxes and benefits, that occur before an employee receives their paycheck. This makes the correct choice the one that encompasses both required and voluntary deductions.

Front

What is the amount Laura actually takes home from her paycheck called?

Back

Net Income

Answer explanation

The amount Laura takes home after deductions is called Net Income. Gross Income is the total before deductions, while Portfolio and Passive Income refer to specific income types, not take-home pay.

Front

This term describes the amount of time you can cover all your expenses without needing to work.

Back

Wealth

Answer explanation

The term that describes the ability to cover all expenses without working is 'wealth'. It signifies having enough resources to sustain oneself financially for a period.

Front

What type of income is received through investments?

Back

Portfolio Income

Answer explanation

Scott's income from investments is classified as Portfolio Income, which refers to earnings generated from financial assets like stocks and bonds, distinguishing it from earned or passive income.

Front

Mary just landed her dream job and is now earning money by trading her time and effort. What type of income is she receiving?

Back

Earned Income

Answer explanation

Mary is earning money by trading her time and effort, which classifies her income as Earned Income. This type of income is derived from active work, unlike passive or portfolio income.

Front

What type of income is based on previous work and comes without any new effort?

Back

Passive Income

Answer explanation

Grace's income from the rental property is considered passive income, as it is generated without active involvement. This type of income allows her to earn money while not directly working for it.

Front

Simone and Kevin are on a mission to grow their treasure chest by putting their gold coins into places that promise to multiply them. What are they up to?

Back

Investing

Answer explanation

Simone and Kevin are looking to grow their treasure chest, which indicates they are seeking ways to increase their wealth. This aligns with investing, as it involves putting money into ventures that can multiply their coins.