Consumers ed unit 3

earned income

money you receive from employment

payroll deductions

employer automatically takes out of a workers paycheck

wage

hourly rate of pay

piecework wage

paid for each unit of work

salary

fixed rate of pay

commission

a percentage of the amount made on a sale

bonus

extra money an employer gives to workers

tip

extra money a customer gives to a worker for good service

paycheck stub

record of what you were paid 

gross pay

total amount a worker earns 

net pay 

gross pay with taxes deducted 

income tax

tax on the amount of money you earn from employment

w-4 form

determines how much the employer should withhold each month

FICA tax deductions

pay for social security and medicine

sales tax

you pay when purchasing items

property taxes

you must ay on real estate and personal property you own

estate taxes

heirs must pay when they inherit money

mandatory expenditure

mandatory government spending

Discretionary expenditures

expenses that are not required

tax return form

1040

deficit spending

government spends more money that it collects in taxes

progressive tax

charges a higher percentage on the wealthy

w-2 form

how much money an employers withhold forma. workers pay in one year

bank

financial institution hat receives leads and exchanges and safeguards money

depository institution

accept money from customers and put it in accounts for customers to use

nondespository institute's

accept money from customers to invest or as payment for some service

checking account

bank account in which you deposit money

savings account

keep money you are saving 

debit/atm cards

you can make cash withdrawals at an automatic teller machine with most debit cards if you use your own banks atm machine it probably not charge a fee

safety deposit boxes

storage spaces in which to keep valuables

loans

make it possible for many people to afford and homes and cars

overdraft protection

coverage in case you accidentally write a check for more money than is in your account

stop payment orders

customers can request that a check not be paid after it has been written

commercial banking

are owned by investors called stockholders or shareholders these banks make money from interest they charge on loans as well as other investments 

community banks

are commercial banks that are locally owned and operated

mutal savings banks

are owned by their depositors these banks distribute their earnings to their depositors In payments called dividends 

checkbook register

a record of transactions that you keep 

bank statements

list of transactions your bank will send to you

Reconciliation

you check your record with bank statement

credit union

nonprofit organizations

intrest calculations

principal x rate x time

yield

total intrest 

compounding

adding interest to principal

compound interest

find simple interest then divide by rate of compounding

rule of 72

how long it will take your money to double ( 72/ interest rate= how many years it will take)

annual percentage yield

yearly amount if intreats you will get with compound interest ( original deposit x APY)

principal

amount you deposit in the account

compounding

adding interest to principal

rate of compounding

number of times the bank will compound your interest in one year

pay yourself first

wait until all bills are paid to put money in savings

passbook savings account

a savings account where all transactions are recorded in a physical booklet held by the depositor, called a passbook