Personal Finance Midterm Spring 2021

money earned

• salary
• income
• purchase
• spend

another person gives you money that you will then need to pay back

• borrow
• purchase
• scarce
• labor

to obtain by paying money for an item or a service

• income
• purchase
• saving
• salary

the money paid by the borrower to the lender for the use of the lender's money

• interest
• savings plan
• scarce
• purchase

a plan that helps you save money regularly, so you can reach you goals

• credit
• savings plan
• borrow
• credit

What is a budget?

• A type of savings account

• A way to invest for retirement

• A fund for emergencies

• A financial plan that defines expenses for a period of time.

What is an emergency fund?

• A savings account set aside for unexpected situations.

• A way to invest for retirement.

• Something most people don't need, because emergencies are rare.

• An investment account that can grow over time.

How many months of expenses should be set aside for an emergency fund?

• 3-6 months

• 6-12 months

• 12-18 months

• 1-3 months

Which of the following are characteristics of money used as savings, including emergency funds?

• Safe

• Accessible

• Liquid (in the form of money)

• Invested in risky business ventures

Certificate of Deposit (CD)

• The price of money

• An account that pays interest on a lump sum of money

• An account that hold money not spent on current expenditures