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30 Cards in this Set

  • Front
  • Back
Amortized Loan
A loan paid off in equal installments.
A series of equal dollar payments coming at the end of each time period for a specified number of time periods.
Capital Asset
An asset you own, except for certain business assets, including stocks, bonds, real estate, or collectibles.
Capital Gain/Capital Loss
The amount by which the selling price of a capital asset differs from its purchase price. If the selling price is higher than the purchase price, a capital gain results; if the purchase price is higher than the selling price, a capital loss results.
Expenses that reduce taxable income.
Discount Rate
The interest rate used to bring future dollars back to the present.
Estate Planning
Planning for your eventual death and the passage of your wealth to your heirs.
The condition in which you owe more money than your assets are worth.
Itemized Deductions
Deductions calculated using Schedule A. The allowable deductions are added up and then subtracted from taxable income.
A book or notebook set aside to record expenditures.
Something that is owed or the borrowing of money.
Anything of value owned by an individual or business.
The relative ease and speed with which you can convert noncash assets into cash. In effect, it involves having access to your money when you need it.
Marginal Tax Rate/Bracket
The percentage of the last dollar you earn that goes toward taxes.
An annuity that continues forever.
Personal Exemptions
An IRS-allowed reduction in your income before you compute your taxes. You are given one exemption for yourself, one for your spouse, and one fore each dependent.
The face value of the deposit or debt instrument.
Taking money that you have earned on an investment and plowing it back into that investment.
Progressive (Graduated) Tax
A tax system in which tax rates increase for higher incomes.
Rule of 72
A helpful investment rule that states you can determine how many years it will take for a sum to double by dividing the annual growth rate into 72.
Social Security
A federal program that provides disability and retirement benefits based on years worked, amount paid into the plan, and retirement age.
Standard Deduction
A set deduction allowed by the IRS regardless of what taxpayers' expenses actually were.
Income on which the payment of taxes is postponed until some future date.
Acceleration Clause
A loan requirement stating that if the borrower misses one payment, the entire loan comes due immediately.
After-Tax Return
The actual return you earn on taxable investments once taxes have been paid. It is equal to the taxable return (1 – marginal tax rate) + the nontaxable return.
Annual Percentage Yield (APY)
The simple annual percentage yield that converts interest rates compounded for different periods into comparable annual rates. It allows you to easily compare interest rates.
Asset Management Accounts
Comprehensive financial services packages offered by a brokerage, firm, which can include a checking account; credit and debit cards; an MMMF; loans; automatic payment of fixed payments such as mortgages; brokerage services (buying and selling stocks or bonds); and a system for the direct payment of interest, dividends, and proceeds from security sales into the MMMF.
Assumable Loan
A mortgage loan that can be transferred to a new buyer, who simply assumes or takes over the mortgage obligations.
Balloon Payment Mortgage Loan
A mortgage with relatively small monthly payments for several years (generally 5 or 7 years), after which the loan must be paid off in one large balloon payment.
A type of security that's actually a loan on which you receive interest, generally every 6 months for the life f the bond. When the bond matures, or comes due, you get back your investment, or “loan.”