Personal Finance

Insurance

• payment to a lender to compensate them for the inconvenience of not having their money now

• a risk management plan of protection against financial loss

• the benefit you get from receiving an amount of money now versus an identical amount of money at a future date.

• investors pool their money for a fund manager to invest in a collection of stocks

Premium

• monthly payments to get an insurance plan

• amount that insured must pay before insurance

• percentage of bill the insured is responsible for

• max amount insured must pay

Deductible

• monthly payments to get an insurance plan

• flat fee for basic services like doctor's visits or prescriptions

• percentage of bill the insured is responsible for

• amount that insured must pay before insurance

Coinsurance

• amount that insured must pay before insurance

• max amount insured must pay

• monthly payments to get an insurance plan

• percentage of bill the insured is responsible for

Out of Pocket Maximum

• percentage of bill the insured is responsible for

• max amount insured must pay

• amount that insured must pay before insurance

• monthly payments to get an insurance plan

Co-payment

• flat fee for basic services (dr. visits/prescriptions)

• monthly payments to get an insurance plan

• investors pool their money for a fund manager to invest in a collection of stocks

• the interest rate is paid only on the principal amount

Time Value of Money

• the benefit you get from receiving an amount of money now versus an identical amount of money at a future date

• a risk management plan of protection against financial loss

• purchasing a share of ownership in a company; profits come from selling that share at a higher price

• government pays the interest on the loan while you’re in college

Interest Rates

• payment to a lender to compensate them for the inconvenience of not having their money now

• investors pool their money for a fund manager to invest in a collection of stocks

• repaid at regularly scheduled intervals, or installments

• a numerical rating of your credit history

Simple Interest

• the interest rate paid on the principal amount, plus all previously accumulated interest payments

• used for depositing money at a bank or other financial institution, with low interest rates

• The ability to borrow money now with the agreement to pay it (the principal amount) back later, plus interest

• the interest rate is paid only on the principal amount

Compound Interest

• a numerical rating of your credit history

• the interest rate is paid only on the principal amount

• the interest rate paid on the principal amount, plus all previously accumulated interest payments

• used for depositing money at a bank or other financial institution, with low interest rates