H&R Block Budget Challenge and Chapter 2 Test

Net Pay - ANSWER-Amount of income left after taxes and deductions have been taken out. Gross Pay - ANSWER-the total amount of an employee's earnings before deductions are taken out Deductible - ANSWER-Amount you must pay before you begin receiving any benefits from your insurance company Prorate - ANSWER-When you are charged only the amount you will use. For example, when moving into an apartment, you would not pay the full month's rent if you are moving in after the first of the month. You will pay for the number of days you will actually be living in the space. Interest - ANSWER-A sum paid or charged for the use of money or for borrowing money Compound Interest - ANSWER-interest earned on both the principal amount and any interest already earned Taxable Income - ANSWER-the earnings on which tax must be paid; total income minus exemptions and deductions Grace Period - ANSWER-the time between the billing date and the payment due date when no interest is charged Character - ANSWER-Saving is an exercise in __________ Sinking Fund - ANSWER-Saving money over time for a large purchase Overdraft Protection - ANSWER-A system used by the bank to keep you from using more money than you have. If you do not have the correct amount in the account you are trying to use, it will be drafted from a linked account. Bounced Check - ANSWER-a check that is not honored by a bank and is returned to the payee's bank due to nonsufficient funds nonsufficient funds - ANSWER-situation in which the payer's account does not have enough money to cover the amount of the check