Dave Ramsey- Chapter 1 Questions and Answers

Dave Ramsey- Chapter 1 Questions and Answers What is personal finance? - Answer️️ -All of the decisions and activities of an individual or family regarding their money; including spending, saving, budgeting, etc. What is a loan? - Answer️️ -A debt evidenced by a "note" which specifies that principal amount, interest rate and date of repayment What is interest? - Answer️️ -A fee paid by a borrower to the lender for the use of borrowed money; typically interest is calculated as the percentage of the principal (original loan amount) What is financial literacy? - Answer️️ -The knowledge and skill set necessary to be an informed consumer and manage finances effectively What is economy? - Answer️️ -A system by which goods and services are produced and distributed What is debt? - Answer️️ -An obligation of repayment owed by one party (the debtor/borrower) to the second party (the creditor/lender); in most cases this included repayment of the original ban plus interest What is credit? - Answer️️ -The granting of a loan and the creation of debt; any form of deferred payment What is the consumer? - Answer️️ -A person or organization that uses a product or service What are the key components of financial success? - Answer️️ -1. Access your financial situation