Intermediate Credit Vocabulary Quiz

What is Amortization?

• What a person owns, such as cash, stocks, bonds, real estate, and personal possessions.

• The process by which loan payments are applied to the principal, or amount borrowed, as well as the interest on a loan according to a set schedule.

• Disciplined saving or setting aside money as a regular part of the budget for later spending or investing.

• The relationship between time, money, and rate of return (interest), and their effect on earnings growth. The more time, money, and rate of interest, the more money yielded at the end of a period of time.

What analysis technique considers strengths, weaknesses, opportunities and threats?

(a)  

A situation in which interest is earned on previously earned interest in such a way that earnings accumulate more rapidly over time.

(a)  

What is the definition for Annual Percentage Yield?

• The actual interest rate an account pays per year with compounding included; calculated the same way by all banks/credit unions.

• The finance charge or total amount it costs per year to use credit, calculated as a percentage of the amount borrowed (percentage rate), including interest, transaction fees, and service charges.

• An electronic machine that bank customers and credit union members can use to withdraw cash and make financial transactions.

• The unique pass code number you use to get access to your savings and/or checking account.

The willingness to give up something you want now in order to get something better in the future.

(a)  

Amount a person owes, such as unpaid bills, credit card charges, personal loans, and taxes.

• Profit

• Assets

• Liabilities

• Net Profit

To earn a profit consists of which of the following? (Select all that apply)

• Selling Price

• Cost

• Product or Service

• SWOT Analysis

The finance charge or total amount it costs per year to use credit, calculated as a percentage of the amount borrowed (percentage rate), including interest, transaction fees, and service charges.

• APY

• APR

• ATM

• CD

In 3-5 sentences, describe how credit/debt can impact wealth-building/net profit.

In 3-5 sentences, describe time value of money. What are the pros and cons to factoring debt into time value of money?