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FIPF CH1
Foundations in Personal Finance Chapter 1
Term | Definition |
---|---|
Personal Finance | All of the decisions and activities of an individual or family regarding their money, including spending, saving, budgeting, etc. |
Consumer | A person or organization that uses a product or service |
Economy | A system by which goods and services are produced and distributed. |
Debt | An obligation of repayment owed by one party (the debtor) to a second party (creditor) in most cases this includes repayment of the original loan amount plus interest |
Loan | A debt evidenced by a "note" which specifies the principal amount, interest rate and date of repayment |
Financial Literacy | The knowledge and skillset necessary to be an informed consumer and manage finances effectively. |
Interest | A fee paid by a borrower to the lender for the use of borrowed money |