Gross Pay n pay before deductions may include

Gross Pay n pay before deductions; may include insurance, taxes, etc

Net Pay n take-home pay after deductions; usually near 70 -75% of gross pay

Where should I put my $$$$$ n bank accts, savings and loan associations, and credit unions offer: 1. security of keeping $ in a safe, insured place 2. convenience of being able to withdraw $ when needed 3. advantage of earning extra $

3 types of bank accounts Savings n Checking n Credit n

Savings Accounts n holds $ and pays interest (payment in exchange for using your $ to make loans and investments) which depends on 4 factors:

Principal n amt $ in acct; minimum balance

Interest Rate n relatively low; can earn more through other investments which require more $ and certain periods of time like CDs or gov’t savings bonds

Time n how long $ is in acct

How often interest is paid yearly, quarterly n compound interest - $ earned on principal plus previous interest n

Checking account acct that holds $ and allows you to pay for things by writing checks rather than using cash; help you keep track of your expenses and income n *may have minimum balance, monthly service fee, fee for checks written n

Credit arrangement by which you receive $, goods, services now & pay later n real cost is purchase price plus interest n $200 AT 1. 5%/mo (APR)18%/yr becomes $3/mos $36/yr $236 pay $ for using credit n costly if take a long time to repay n grace period - time in which $ can be repaid w/o finance charge n

Loan credit borrowing $ from bank (loan, credit card) co-signer - person agrees to makes payments if other fails n

Sales Credit n charge acct at store; credit limit

* use credit for emergencies n *avoid using credit for wants n *use for expensive purchases that have a long life n *pay off during grace period n *make payments on time n *shop for credit cards to get lowest APR (annual percentage rate) n

Credit Rating person’s record of paying debts in the past and sent to a credit bureau; n if you always use cash will never have a credit rating n improve credit ratings by owning a home or car, having the same job for several years, living in one place for several years, earning high income n

Suppose you are buying a new guitar, which costs $450. If you buy the guitar using the store’s layaway, you will have to pay $60 up front plus $65/mo for 6 mos. If you buy it using a credit card and pay it off over the same 7 mos, it will cost you $70/mo. Which plan would you choose? How much more would charging cost? The Hoffmeyers took out a loan of $5000 to renovate their house. They have to repay the loan in 36 monthly payments of $168. 47. How much are the Hoffmeyers paying in finance charges?

Leasing n rent w/ large down payment; buyout option