RC Ch. 3 Vocab

What is an emergency fund?

• A savings account set up specifically to be used to cover financial emergencies

• A purchase that requires a significant amount of money

• The percentage of principal charged by the lender of the use its money

• The amount of interest charged on a debt but not yet collected

What is a large purchase?

• A savings account set up specifically to be used to cover financial emergencies

• A purchase that requires a significant amount of money

• The percentage of principal charged by the lender of the use its money

• The amount of interest charged on a debt but not yet collected

What is an interest rate?

• A savings account set up specifically to be used to cover financial emergencies

• A purchase that requires a significant amount of money

• The percentage of principal charged by the lender of the use its money

• The amount of interest charged on a debt but not yet collected

What is accrued interest?

• A savings account set up specifically to be used to cover financial emergencies

• A purchase that requires a significant amount of money

• The percentage of principal charged by the lender of the use its money

• The amount of interest charged on a debt but not yet collected

What is compound growth?

• The average rate of growth for an investment over time; often expressed as an annual figure

• Interest paid on interest previously earned

• The initial amount of money invested or borrowed

• The measure of an investment's profit or loss, usually expressed as a percentage of the initial investment

What is compound interest?

• The average rate of growth for an investment over time; often expressed as an annual figure

• Interest paid on interest previously earned

• The initial amount of money invested or borrowed

• The measure of an investment's profit or loss, usually expressed as a percentage of the initial investment

What is principal?

• The average rate of growth for an investment over time; often expressed as an annual figure

• Interest paid on interest previously earned

• The initial amount of money invested or borrowed

• The measure of an investment's profit or loss, usually expressed as a percentage of the initial investment

What is rate of return?

• The average rate of growth for an investment over time; often expressed as an annual figure

• Interest paid on interest previously earned

• The initial amount of money invested or borrowed

• The measure of an investment's profit or loss, usually expressed as a percentage of the initial investment

What is inflation?

• The persistent rise in the cost of goods and services over time

• Interest paid on interest previously earned

• The initial amount of money invested or borrowed

• The measure of an investment's profit or loss, usually expressed as a percentage of the initial investment

What is time value of money?

• The persistent rise in the cost of goods and services over time

• Interest paid on interest previously earned

• The initial amount of money invested or borrowed

• The concept that an amount of money is worth more today than in the future due to earning potential