Personal Finance and Banking Lecture Review (test Friday 9/11/26)

Vocabulary flashcards generated from personal finance and banking lecture notes covering paycheck deductions, tax forms, banking accounts, loans, insurance, and interest calculations.

Net Pay

Also known as 'take home' pay, it is the total amount of money you earn after all payroll deductions (such as taxes) are subtracted from your paycheck.

W-4 Form

A form completed by an employee when starting a job to inform the employer how much tax to withhold from their paycheck based on marital status, allowances, and dependents.

Mortgage Loan

A long-term loan specifically used to purchase a home.

Escrow Fund

A dedicated account managed by a mortgage lender where a portion of a monthly mortgage payment is set aside in advance to ensure property taxes are paid on time.

Alabama Property Taxes

Taxes on property in the State of Alabama that must be paid once before the end of the year.

W-2 Form

A form provided by an employer at the end of each year detailing total earnings and total deductions taken out for the year, used by the employee to file income taxes.

Gross Pay

The total amount of money earned from a job before any taxes or payroll deductions are made.

Government-Issued Identification

A document such as a driver's license or passport that is required when opening a bank account.

Sales Tax

An additional cost added to the purchase price of an item at a store to determine the final cost.

APR

Annual Percentage Rate; the yearly interest rate used by credit card companies to calculate interest charges.

Certificate of Deposit (CD)

A document issued by a bank proving that a specific amount of money has been deposited for a fixed period of time at a set interest rate, during which the money must remain untouched.

Bundling Insurance

Purchasing multiple insurance policies (such as home and auto insurance) from the same company, offering convenience, single-company policy management, and money-saving discounts.

Credit

An arrangement allowing a person to obtain goods or services immediately and pay for them later, usually incurring interest for borrowing money.

Traditional Savings Account

An account insured by the FDIC or NCUA that offers the lowest interest rate among investments and may limit monthly withdrawals, yielding lower total earnings.

Compound Interest

Interest earned on interest gained, allowing money to grow on both the saved principal and the interest accumulated over time.

Bank

A financial institution that accepts deposits, makes loans, keeps money safe for saving and commercial purposes, and provides financial services such as CDs, retirement accounts, and safe deposit boxes.

Simple Interest

A fixed interest calculation applied only to the original principal amount borrowed throughout the loan term, calculated using the formula $I = prt$.