Personal Finance Chapter 1 Vocabulary Quiz

What is debt?

• The cost of goods or services

• An obligation to repay borrowed money

• The total value of a person's assets

• Interest paid on investments

What is interest?

• The total value of a person's assets

• The charge for borrowed money, generally defined as a percentage

• An unlimited amount of wants

• A monthly plan for saving and spending

How is net worth calculated?

• By subtracting liabilities from assets

• By adding expenses and income

• By calculating interest on investments

• By determining the cost of goods

What is simple interest?

• Interest paid on an investment and on any interest previously earned

• Interest paid only on the principal investment

• The charge for borrowed money

• The cost of goods or services

Who is a consumer?

• A person or organization that grants loans

• A person or organization that purchases a product or service

• A person or organization that saves money

• A person or organization that invests in stocks

What is a nonprofit organization?

• A tax-exempt organization serving the public

• A company that grants loans

• An individual who invests in stocks

• A person who purchases products

What does a budget help you do?

• Plan how to save and spend your income

• Calculate interest on investments

• Determine the value of assets

• Repay borrowed money

What is a liability?

• Anything of value that is owned

• Anything you owe; a debt

• A monthly plan for saving

• Interest paid on investments

What is compound interest?

• Interest paid only on the principal investment

• Interest paid on an investment and on any interest previously earned

• The charge for borrowed money

• The cost of goods or services

What does credit involve?

• The creation of a budget

• The granting of a loan and the creation of debt

• The calculation of net worth

• The investment in growth accounts