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5.01
Personal Finance
Term | Definition |
---|---|
Compound Interest | Earning interest on interest. |
Consumption | The purchase of goods and services. |
Do It Yourself | When you complete a task yourself rather than paying someone else. |
Emergency Savings | Cash set aside to cover the cost of unexpected events. |
Interest | Price paid for using someone else's money. |
Interest Rate | Percentage rate used to calculate interest. |
Liquidity | How quickly and easily assets can be accessed and converted into cash. |
Pay Yourself First | Saving for the future by putting money aside before paying regular monthly bills or using income for discretionary purchases. |
Principal | The original amount of money saved or invested. |
Saving | Accumulation of excess funds by intentionally spending less than you earn. |
Savings | Portion of income not spent on consumption. |
Time Value of Money | Money available at the present time (today) is worth more than the same amount if received in the future. |