Understanding Key Financial Terms

What does APR stand for in the context of credit cards?

• Annual Percentage Rate

• Annual Payment Rate

• Average Payment Rate

• Annual Principal Rate

Which of the following best defines 'interest' in financial terms?

• The amount of money borrowed from a bank

• The cost of borrowing money or the return on investment

• The total amount of money in a savings account

• The principal amount of a loan

What is the primary function of a 'savings account'?

• To provide a line of credit for purchases

• To earn interest on deposited funds

• To facilitate daily transactions

• To pay off debts

Which of the following best describes 'credit'?

• Money that is owed to you by others

• The ability to borrow money or access goods or services with the understanding that you'll pay later

• A type of savings account

• A financial deficit

What is a 'checking account' primarily used for?

• Long-term investments

• Earning high interest

• Daily transactions and bill payments

• Building credit history

What does 'debit' refer to in financial terms?

• A loan taken from a bank

• An entry recording an amount owed

• A payment made from a bank account

• A type of credit card

How is 'debt' best defined?

• Money that is saved for future use

• Money that is owed or due

• A surplus of funds

• An investment in stocks

What does 'deficit' mean in financial terms?

• An excess of income over expenditure

• A shortfall where expenses exceed income

• A balanced budget

• A type of savings account

Which of the following is NOT a characteristic of 'trust' in financial terms?

• A legal arrangement to manage assets

• A type of savings account

• A fiduciary relationship

• An entity that holds property for the benefit of others

What is the primary difference between 'credit' and 'debit'?

• Credit is money you owe, while debit is money you save

• Credit increases your account balance, while debit decreases it

• Credit is a loan, while debit is a payment from your account

• Credit is a type of savings account, while debit is a type of checking account