Day 9 - Review Chapter 1 Key Terms

Chapter 1 Key Terms:

»»Consumer: A person or organization

that uses a product or service

»» Credit: The granting of a loan and the

creation of debt; any form of deferred

payment

»» Debt: An obligation of repayment owed

by one party (the debtor/borrower) to

a second party (the creditor/lender); in

most cases this includes repayment of

the original loan amount plus interest

»» Economy: A system by which goods and

services are produced and distributed

»» 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;

typically interest is calculated as a

percentage of the principal (original

loan amount)

»» Loan: A debt evidenced by a “note,”

which specifies the principal amount,

interest rate and date of repayment

»» Personal finance: All of the decisions

and activities of an individual or family

regarding their money, including

spending, saving, budgeting, etc.