Quantitative Literacy Exam Review
budget - keeping track of how much money you have coming in and going out and then
deciding what adjustments you need to make
cash flow - subtracting your monthly expenses from your monthly income
Premium - The amount you pay to purchase the policy often paid once or twice a year
deductible - the amount you are personally responsible for before the insurance
company will pay anything
Co-payment - the amount you pay each time you use a particular service that is covered
by the insurance policy
Principal - the amount of money on which interest is paid
Simple Interest - interest paid only on your initial investment
Compound Interest - Interest that the bank pays you on the interest as well as on the
original principal
Annual Percentage Rate (APR) - Interest that is compounded annually
A - accumulated balance after Y years
P - starting principal
APR - Annual Percentage Rate
Y - number of years
Annual Percentage Yield - the actual percentage by which a balance increases in one
year
Savings Plan - depositing small amounts on a regular basis
total return - the percentage change in the investment value
annual return - the average annual rate at which your money grows
