Unit Five Personal Finance

No matter where you put money, what are the two key factors to always consider?

Answer explanation

The Risk and the Rate of Return

What does it mean to “Pay yourself first?”

Answer explanation

Put money away each payday that won't be used for spending

COMPOUNDING means you earn interest on your _____?

Answer explanation

INTEREST or INVESTMENT

3 elements that affect the rate of return on an investment are?

Answer explanation

TIME

Rate of Interest

AMOUNT Invested

M1 + short-term savings accounts & money market accounts (definition)

• M1

• M&M

• M3

• M2

Insures the money you deposit in a bank or credit union up to $250K. (definition)

Answer explanation

FDIC or the Federal Deposit Insurance Corporation

Money that has value because the government says it does. (definition)

Answer explanation

FIAT Money

Today's modern money mainly consists of?

Answer explanation

Electronic/Debit

Coins

Cash or Paper Money

Checking

There are 3 uses of money. Which is the single most used?

• Measure of Value

• Medium of Exchange

• Store of Value

• Unit of Account

Two rules you should live by when it comes to finances are: Pay yourself first and _____?

Answer explanation

Spend less than you make