Transcript Applied Business Practices - Rantoul Township High School

Applied Business Practices
Final Exam Review
Credit
– Borrowing money with the promise
to repay in the future
• Installment Loan
–Loan in which you make
monthly payments for a specific
amount of time
Credit
• Finance Charge
– Total dollar cost of credit including interest and
all other charges
• Interest
– Cost of borrowing
Credit
• Comparing Credit Cards
– Annual Fees
– Interest rates
– Other Fees
– Benefits
– Introductory rates
• Most common type of credit card
– Bank Card
Credit
• Character
– Willingness to repay
• Capacity
– Ability to repay the debt
• Capital
– Value of your assets
Credit
– Collateral
• Property pledged to back a loan
– Co-signer
• Person who signs on a loan with you and will be responsible
for the repayment if you don’t
Credit
•
Credit Report
– shows the debts you owe, how often you
use credit and whether you pay your debts
on time
•
Credit Bureau
– Company that gathers information on your
credit
Credit
• Truth in Lending
– Must provide the total cost of credit before
signing an agreement
• Equal Credit Opportunity Act
– Prohibits creditors from denying a person
credit because of age, race, gender, or marital
status
• akes
Credit
• Consumer Credit Reporting Reform Act
– Now the burden of proof of unfavorable credit is now
on the credit reporting agency not the consumer
• Fair Debt Collecting Act
– bans threats and other inappropriate actions when a
creditor is trying to collect debt
Credit
• Bankruptcy
– Legal process of reducing or eliminating an amount
owed
Taxes
• Tax Return
– Set of forms used by taxpayers to calculate
tax obligation
• Form W-4
– Provides the information of the amount to
withhold from your paycheck.
– Completed by the Employee
• Allowances
– More allowances = less withheld from
paycheck
Taxes
• Withholding
– Deducting money from your wages to collect
payroll taxes
• Gross Income
– Amount you earn before taxes are withheld
• Net Income
– Amount you receive after withholdings are
deducted from your gross pay.
Taxes
• Form W-2
– Summary of your earnings and withholdings
for the year for a job
• Withhold too much = Refund
• FICA
– Law requiring payment of Social Security
and Medicare taxes
Taxes
• IRS
– Agency that collects taxes
• Employers and Employees pay the same
amount of Social Security and Medicare
taxes
• Taxes are due April 15
• Dependents – people you financially
support
Taxes
• Estate Taxes
– Taxes on property received when someone
dies
• Excise Tax
– Collected on sale of specific goods or
services
• Gas
• Firearms
• Air travel
Taxes
• Sales Tax
– Taxes added to items purchased
• Sin Tax
– Taxes on items harmful to your health
• Business (License) Tax
– Tax paid for certification
– May be accompanied by a test
Taxes
• Federal Government Spends on:
– Social Security, Medicare, other retirement
– National defense
– Welfare
• State/Local Government Spends money on:
– Roads
– Schools
– Unemployment
• Fill out a 1040 tax return when
– Give to charities
– Have dependents
Moving out on Your Own
• Landlord
– Owns rental property
• Lease
– Legal agreement that gives you the right to
live at a property for a specific time
• Purpose of a lease
– Protect landlord and tenant
Moving Out On Your Own
• Security Deposit
– Money the landlord will hold to cover for
damages
• Rent should be no more than 1/3 of
monthly income
• Renter’s Insurance covers
– Tenant’s belongings
Moving Out on Your Own
• Mortgage
– Loan to buy a home
• You can afford 2.5 times your annual
income when buying a home
• Fixed Expenses
– Savings, rent, insurance
• Variable
– Going out to eat, shopping, going to movies
Moving Out on Your Own
• Energy label
– Predict the cost of running an appliance
• Appraisal
– Tells the value of a home
• Lien
– Claim against a property
Buying a Car
• Insurance
– Bodily Injury Liability
• Covers other people in other car
– Property Damage Liability
• Covers other car or property
– Collision
• Covers your car when you are at fault in accident
– Comprehension
• Covers for any non-collision damages such as
theft or a tree falls on car
Buying a Car
• Test drive a car for
– 30 to 45 minutes
• Signs of Engine trouble
– Blue or black exhaust
• As-Is Warranty
– Buyer pays for all repairs
Buying a Car
• Invoice Price
– Price the dealer pays
• Margin
– Amount you negotiate when buying a car
(between invoice and sticker)
• Fair price to offer for a car is 10 – 13%
over invoice price
Buying a Car
• Good source to use when buying a car is
– Consumer Reports (or Consumer
Reports.org)
• Odometer
– Measures miles traveled
• To get best price for TRADE-IN
– Sell it yourself