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Personal Finance- Final Exam Study Guide.Please fill in the following –using the power points on bettfinance. – you will be able to pick 10 things to write on your note card for the final. We will review it WednesdayTaxesIncome TaxPayroll TaxProperty TaxSales TaxExcise Tax____________ Funds the Social Security and Medicare programs.____________ The fee to license a car us thus type f tax____________ A tax earned on earned and unearned income____________ The tax on airline tickets, cigarettes, and gasoline____________ The tax determined by a set percentage of earned income_____________ The tax on goods and services_____________ The specific amount paid for this tax depends on many factors but increases as income increasesHow do taxes relate to the principle “You are better off being in a community than by yourself?As a persona living in the United States you are a tax payer. What are 2 benefits you receive from the taxes you pay?What is the difference between earned and unearned income> Give at least one example of eachGoalsWhat does SMART stand forBE able to write a SMART goalHow can setting goals help create well-being?Way is it important to write down goals?How can goals help you manage your money?Depository InstitutionsCredit UnionCommercial BankBoth___________________ Anyone can open an account here__________________ Offers financial services_________________ Owned by their customers_________________ In business to make money__________________ Membership requirements to open an accountWhat are 2 benefits depository institutions can provide?What would be the 3 most important factors would you consider when deciding which institution fits your needs?What are 2 ways depository institutions keep your money safe?What is the difference between a checking account and a savings account? True / False ____ A debit card can be described as an electronic check that requires a PIN____ An overdraft fee may be charged if you exceed your checking account balance when using your debit card._____ One person can open accounts at more than one depository institution_____ A person can earn and be charged interest_____ All depository institutions are required by law to charge the same fees.Getting PaidNet IncomeDependentEmployee BenefitsPay StubTax Liability___________ Total tax bill____________ Amount of money left once all deductions have been taken from gross income___________ Products and services provided by an employer that adds extra value for employees beyond wages paid____________ A person who relies on the taxpayer for financial support____________ Outlines deductions made to the wagesWho benefits more from being paid in cash: employer or employee? ExplainStacey is starting a new job at Hats-n-More. Inorder for her manager to know how much to withhold in federal income taxes, Stacey has to fill out which form?W2I9W41040ezSavings ToolsCertificate of depositChecking accountSavings accountMoney market account______________ A depository institution account that is designated to hold money not spent on current consumption______________ An account at an institution that is used for a fixed period of time and allows restricted access to the funds deposited._____________ An account at an institution that provides an easy method for withdrawing and depositing money._____________ An account at an institution that usually has a minimum balance requirements and tiered interest plete the chart below by listing the most liquid savings tool to the least.Most379317803201.2.3.plete the chart below by listing the savings tool with the highest interest rates to the lowest interest rate.Highest Interest379317803201.2.3.Lowest Interest4.Fundamentals of InvestingDefine each of the following types of investment tools. Indicate if it is a form of lending or owning.Investment toolDefinitionLending or owning?StocksBondsMutual FundsWhat is diversification?Which investment tool offers the best diversification? Stocks, Bonds, Mutual FundsWhat is the Rule of 72?Credit Reports and ScoresOpen Ended CreditClosed Ended CreditCreditCredit ReportCredit HistoryLender_____________________ A Record of the borrower’s past loan and credit-related transactions___________________ A loan of a certain amount of money that a borrower must repay in a specific number of equal payments.___________________ When goods, services and/or money is received in exchange for a promise to pay back a definite sum of money at a future date.________________ A person of organization who makes funds available to borrow.Place an N on the line of the statement that will create negative credit; place a P on the line if the statement will create positive credit.____ Maintaining a reasonable amount of unused credit.____ Routinely paying bills late____ Numerous credit applications in a short period of time____ Checking credit reports annually to search for mistakes____ Having many of the same types of credit accounts (ex. Consumer)What is the ONLY free place to check your credit report?What are the 3 credit reporting agencies?List 3 ways a 20 year old may begin to build credit.Understanding Credit CardsAnnual FeeAPRBalance transfersCredit LimitsIntroductory RateLate Payment FeeOver the Limit FeePenalty RateVariable Rate APR___________ transferring debt from one credit card to another____________ Charged if the account balance goes over the credit limit___________ The maximum amount of charges allowed to an account___________ The cost of credit expressed as a yearly interest rate___________ The interest rate that may be charged right after a credit card is opened___________ A yearly fee that may be charged for having a credit card___________ Charged when the cardholder does not make the minimum monthly payment by the due date___________ The interest rate charged on new transactions is the penalty terms in the credit card contract are triggeredIs a 13% or 18% APR for a credit card better? Why?How can a consumer avoid paying interest on a credit card?What is the difference between a debit and a credit card?Identify 3 positive ways to manage your credit card.What is the typical liability for a cardholder for unauthorized charges on a credit card? A debit card?Paying for Higher EducationDefermentFinancial NeedForbearanceGrantLoan DefermentScholarshipSubsidized LoanUnsubsidized Loan__________ The difference between the cost of attending a particular school and the expected family contribution, minus any other financial aid___________ Postponement of payment on a loan allowed under certain conditions when interest does not accrue.___________ Money awarded to student that does not have to be repaid and is based on academic or other achievements____________ Failure to repay a loan according to the agreed terms___________ Stop or reduce loan payments for a short period of time while interest is accruing.____________ A need based loan from the federal government, the interest of which is paid for by the US department of education while the borrower is in school and during grace and deferment periods.______________ A tax exempt financial aid that may be given for many purposes, not necessarily just for education.What is FAFSA?What are three documents you may need when filing the FAFSA? ................
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