Social Science Midterm

Its in 3 hours

Amortization

the process of gradually paying off a debt over time through regular payments that cover both principal and interest. 

Appreciation/Depreciation

An increase in the value of an asset, such as a house or stock, over time (appreciation); A decrease in the value of an asset over time (depreciation).

APR (Annual Percentage Rate) –

The yearly percentage interest on an overdue credit card balance.

Behavioral economics

The study of how emotions, habits, and psychology affect people’s financial decisions, rather than pure logic.

Cost forecasting

Estimating how much money you will need in the future in order to budget accurately.

Credit

Money lent each month from a bank to an individual.

Credit line

The maximum amount of money a lender allows a person to borrow.

Credit utilization rate

The percentage of your available credit that you’re currently using; lower is better.

Debit

Money taken directly from your checking account when you make a purchase.

Default

Failure to repay a loan according to the agreed terms

Direct Subsidized Student Loan

A student loan where the government pays the interest while you’re in school.

Direct Unsubsidized Student Loan

 A federal student loan where interest builds up while you’re in school.

Foreclosure

When a homeowner fails to make mortgage payments, and the lender takes back the property.

Goods

 Physical items that people buy or sell, like food, clothes, or cars.

Grace period

The time after a credit card payment is due when you can still pay without penalty or interest.

Grant

Money given to a student for education that does not need to be paid back.

Hard check/inquiry

 When a bank looks closely at your credit report; it lowers your credit score.

Income growth

The increase in a person’s earnings over time.

Index fund

 A type of investment that tracks a market index rather than a single company.

Interest

The cost of borrowing money, or the money earned on savings or investments.

Loan

Money that’s borrowed and must be repaid, usually with interest.

Market capitalization

The total value of a company’s shares in the stock market, found by multiplying share price by the number of shares.

Mortgage

A long-term loan used to buy a house, where the property itself is the collateral.

Opportunity cost

What you give up when you choose one option over another.

Principal

The original amount of money borrowed or invested, not including interest.

Services

Actions or work done for others in exchange for money, such as teaching, haircuts, or car repairs.

Share

 A unit of ownership in a company.

Stock

A type of investment that represents ownership in a company.

Stock exchange

 A marketplace where stocks and other investments are bought and sold.

Stock index

A measurement that tracks the performance of a group of related stocks, such as technology or energy companies.

Temporal discounting

The tendency to value immediate rewards more than future rewards, even when waiting would lead to a better outcome.