GLOSSARY. Glossary 539

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1 GLOSSARY 401k, p. 439 A retirement savings plan that is sponsored and set up by an employer for its employees; like other retirement plans, there are strict rules as to when the money can be withdrawn without a penalty and strict contribution limits which change from year to year. 403b, p. 439 A tax-deferred retirement savings program for employees of educational institutions and some non profit organizations. 52-week high, p. 10 The highest price at which one share was traded over the last year. 52-week low, p. 10 The lowest price at which one share was traded over the last year. A accident reconstructionist, p. 274 Person with knowledge of both crime scene investigations and the mathematics that can help to explain the circumstances surrounding the accident. account number (banking), p. 123 This number appears on all checks, deposit slips, and bank statements. account number (credit card), p. 201 A unique number that identifies a credit card holder. actuary, p. 239 A statistician who predicts how many customers will submit claims based on criteria such as age, sex, marital status, driving record, and residence. adjustable rate mortgage, p. 401 A mortgage in which the monthly payment and the APR may change, as specified in the signed agreement. adjustment period, p. 418 The period between rate changes in an ARM; a loan with a 1-year adjustment period is known as a 1-year ARM, which means that the interest rate and the monthly payment may change at the end of one year. after-hours trading, p. 10 Trades that are made after the stock market closes. after-tax investments, p. 438 Money that is deducted from your income after taxes have been deducted for the purpose of investing. amortization table, p. 415 A listing of the unpaid principal, the monthly payment, the amount allocated to paying down the principal, and the amount allocated to interest. annual compounding, p. 137 A method for calculating interest so that it is paid once a year. annual percentage rate (APR), pp. 143, 181, 201 The interest rate paid per year or charged per year. anti-lock braking system (ABS), p. 274 A system which most cars have that does not allow the wheels to continuously lock; in cars equipped with this feature, the driver feels a pulsing vibration on the brake pedal and that pedal moves up and down; the skid marks left by a car with ABS look like uniform dashed lines on the pavement. apartment, p. 384 A home that is rented or leased by the people who live in it; also called a rental property. apothem, p. 396 A line segment that goes through the center of a polygon that is perpendicular to a side. application deposit, p. 387 Money that Covers the cost of processing the application for the rental. appreciate, p. 245 Increase in value over time. area, p. 395 The amount of space inside a two-dimensional region, such as a floor; area is measured in square units; the living space in a property. arithmetic average (mean), p. 22 A measure of central tendency found by calculating the sum of numbers in a data set and then dividing by the number of elements in the data set. arithmetic average, p. 225 The same as the mean; the sum of all the numbers in a data set divided by the number of elements in the data set. arrears, p. 411 The manner that interest occurs throughout the month before it is paid with the mortgage payment. ascending order, p. 225 Numbers that are in order from the least value to the greatest value. assessed value, p. 401 An assigned value made by the local government on the value of a house for taxation purposes. assets, pp. 174, 516 A person s property or what is owned. at the market, p. 40 Instructions to the broker to get the best possible price. attorney fee, p. 411 Fees paid to an attorney in return for representation at a closing. automated teller machine (ATM), p. 117 Provides 24-hour bank access to make deposits, transfers, and withdrawals. automobile insurance, p. 238 A contract between a driver and an insurance company, where the driver agrees to pay a fee (called the premium) and the company agrees to cover certain accident-related costs when the driver makes a claim (request). available credit, p. 201 The difference between the maximum amount allowed and the actual amount owed on a credit card. average daily balance, pp. 195, 206 The average amount owed per day during a billing cycle. axis of symmetry, p. 87 A vertical line that can be drawn through the vertex of a parabola so that the dissected parts of the parabola are mirror images of each other; the point on the horizontal axis through which the axis of symmetry passes is determined by calculating b 2a. Glossary 539

2 B back-end ratio, p. 406 A factor that banks use when deciding whether to lend money for a mortgage that takes into account a borrower s regular monthly debts, such as car loans, alimony, child support, and credit card bills, to gross monthly income. balancing, p. 123 The process of verifying the bank s records to make sure no errors have been made. balloon mortgage, p. 407 A mortgage with a very large last payment, with all other payments being relatively low. balloon payment, p. 182 The last monthly payment on some loans that is much greater than the previous payments. bank statement, p. 123 A statement that includes all transactions that have occurred for a period of approximately one month. bar graph, p. 497 A type of graph or data display that uses rectangular bars to compare categories of data. base period, p. 311 A fixed period of time that most states use in an unemployment insurance formula to determine weekly benefits. beneficiary, p. 457 A person chosen by the policyholder whose name is on the life insurance policy and who receives the benefits of the policy after the policyholder s death. benefits, p. 291 Additional compensation from an employer; benefits can include health and dental insurance, child care, retirement, and travel expenses. billing cycle, p. 200 A predetermined amount of time set by the credit card company that is used for calculating a credit card bill. billing date, pp. 201, 207 The date that a credit card statement was written. bimodal, p. 228 A set of data that has two modes. bivariate data, p. 64 Data given as pairs of numbers and show a relationship between the pairs. biweekly, pp. 156, 296 Every two weeks. board of directors, p. 423 A group of people who are elected by the condominium or landominium homeowners to manage business matters. bodily injury (BI) liability, p. 238 Covers bodily injury if a driver is at fault in an accident. box-and-whisker plot, p. 234 Also called a boxplot; a type of graph that shows all four quartiles and the least number; it is drawn to scale. boxplot, p. 234 Also called a boxand-whisker plot; a type of graph that shows all four quartiles and the least number; it should be drawn to scale. braking distance, p. 268 The distance a car travels while braking to a complete stop. braking efficiency, p. 275 A number determined by an examination of the rear and front wheel brakes; it can run from 0% efficiency (no brakes at all) to 100% efficiency (brakes are in excellent condition); the braking efficiency number is expressed as a decimal when used in the skid speed formula. breakeven point, p. 80 When the expenses and the revenue are equal, so that there is no profit or loss. British Thermal Units (BTUs), p. 398 A unit of measure by which air conditioners are sold. broker fee, p. 40 A flat fee or commission that a stockbroker charges for trade stocks. budget check-off matrix, p. 497 Where there are no amounts in the budget, but rather check marks that indicate at what time of the year the expenses for the indicated categories will occur. budget line graph, p. 497 A type of graph used when a consumer is comparing two categories of expenses; it indicates the amount that can be allotted to each expense so that both categories can be afforded within a certain income. budget matrix, p. 396 An organizer that contains numerical entries or information on when certain account deposits and withdrawals are made over a period of time. C cafeteria plan, p. 347 A portion of pre-tax wages set aside for the payment of certain medical, childcare, parental care, and nonreimbursed medical insurance expenses. canceled, p. 117 A check that has been processed so that the money is paid to the payee of a check. candlestick chart, p. 19 A chart, like a stock chart, but with a top line that indicates the high price, and a low line that indicates the low price for a given period; the rectangular region, known as the real body, is displayed in two different colors; the green candlestick indicates that the closing price is greater than the opening price and the red candlestick indicates the closing price is less than the opening price. capital, p. 4 Money that is used to start or expand a business. car-rental insurance, p. 239 A type of insurance that pays for part of the cost of a rented car if a car is disabled because of a collision or comprehensive-covered repair. cash flow, p. 508 The money that goes in and out of a budget within a fixed period of time. cash flow analysis, p. 499 A detailing of how money comes in and how money goes out over a fixed period of time. cash value, p. 465 The value of the investment portion of a whole life insurance policy. causal relationship, p. 64 When one variable causes a change in another variable. ccf, p. 482 A unit of measure that represents 100 cubic feet. cell, p. 12 The intersection of a column and row in a spreadsheet where data is entered. central angle, p. 499 The angle formed around the center of a pie chart by the radii that make the sectors. certificate of deposit (CD), p. 132 A certificate that states there is a specific sum of money on deposit and guarantees the payment of a fixed interest rate after a certain period of time, usually seven days to ten years; deposits and withdrawals cannot be made with a CD. charge card, p. 194 A special type of credit card where the monthly bills for all purchases must be paid in full and there is no interest charged. check, p. 116 A written order used to tell a bank to pay money (transfer funds) from an account to the check holder. 540 Glossary

3 check clearing, p. 116 The process that happens when a bank pays for a check out of a checking account; a check is cleared when the bank has transferred the funds from the checking account. check register, p. 119 A record of all transactions in a checking account, including checks written, deposits made, fees paid, ATM withdrawals, and so on. checking account, p. 116 An account at a bank that allows a customer to deposit money and make withdrawals from the funds on deposit using a paper check or electronic transfer. childcare leave, p. 310 An employee benefit that allows employees paid time off to care for sick children or newborns. chord, p. 277 A line segment that connects two points on a circle. claim, p. 238 A request for payment by a driver involved in an accident to an insurance company that provides automobile insurance for the driver. close, p. 9 Also called closing price; The last price at which a stock was traded on a regular trading day. closing, p. 411 A meeting attended by a buyer, seller, attorneys, and a representative of a lending institution for the official sale of a property. closing costs, p. 411 Costs that are paid at closing that include origination fees, attorney fees, points, prepaid interest, transfer tax, and title insurance. collateral, p. 182 Security, such as a personal belonging, car or boat title, CD, or stock certificates, that insures a loan will be repaid. collision insurance, p. 239 A type of insurance that pays for the repair or replacement of an insured car if it is damaged in a collision with another vehicle or object, or if it overturns, no matter who is at fault. This type of insurance is usually required if there is a loan on the car. column, p. 496 A vertical line of values in a matrix or spreadsheet. commission (as compensation), p. 303 A method of payment where an employee receives a percentage of the amount of sales produced by that employee. commission (of stock trades), p. 40 A percentage of the value of a stock trade. compound interest, p. 137 Interest that is earned on the money deposited into an account plus previous interest. common stock, p. 51 A type of stock where the stockholders receive dividends only when the board of directors elects to issue dividends. compound interest formula, p. 143 Formula that can be used to calculate compound interest; B = p (1 + r n ) nt where B is the ending balance, p is the principal or original balance, r is the interest rate, n is the number of times that interest is compounded annually, and t is the number of years. comprehensive insurance, p. 239 A type of insurance that covers the repair or replacement of parts of an insured car damaged by vandalism, fire, flood, wind, earthquakes, missiles, falling objects, riots, tree sprays, and other disasters; it also covers if the car is stolen. condominium, p. 422 A form of home ownership where each unit is individually owned. congruent, p. 396 Figures that have the same shape and size. Consumer Price Index (CPI), p. 457 An indicator of inflation that measures the change in the total cost of a specific list of services and products. continuous compound interest formula, p. 150 A formula for calculating continuous compound interest; B = pe rt, where B is the ending balance, p is the principal, e is the exponential base, r is the interest rate, and t is the number of years the principal earns interest. continuous compounding, p. 150 A method of calculating interest so that it is compounded an infinite number of times each year rather than being compounded every minute, or every microsecond. co-op apartment, p. 423 A form of home ownership where an investor purchases shares of a cooperative and then is able to live in the apartment. cooperative, p. 423 A form of home ownership where a corporation owns a group of apartments and takes out a mortgage to buy the entire apartment complex; investors purchase shares which allow them to occupy the apartments; co-op owners do not own their individual apartment; instead they own a portion of the entire cooperative development. corporate bond, p. 54 A loan to a corporation; the corporation agrees to pay the bondholder back with interest, much like a bank pays a customer with money on deposit. corporation, p. 4 A business organization that is owned by one person or group of people, in which the owner has limited liability in the business, and therefore, is not personally liable. correlation, p. 64 An association between two variables. correlation coefficient, p. 70 Represented by r, it is a number between 1 and 1, inclusive, that is used to judge how closely a line fits the data. cosigner, p. 181 A person that signs a promissory note along with the borrower and agrees to pay back the loan if the borrower does not. cost of living adjustment (COLA), p. 457 A small increase in a retiree s benefits based on the Consumer Price Index (CPI) or cost of living index. credit (banking), p. 119 Deposits into a bank account. credit (purchases), p. 174 When something is bought that is not paid for at the time of purchase. credit calendar, p. 206 A calendar method of finding the average daily balance of a credit card. credit card, p. 193 A type of credit card account that has a revolving charge where the entire bill does not have to be paid in full each month. credit card statement, p. 200 An accounting of the credits and debits in the form of a monthly report sent to a credit card holder. credit line, p. 201 The maximum amount that a person can owe on a credit card at one time. credit rating, p. 174 A credit report card that shows how well a user of credit meets financial obligations; these records are used by creditors when they decide to issue credit. credit reporting agency, p. 175 Organizations that compile records on users of credit as to how well they repay their debts. crediting, p. 137 Interest that is compounded daily, but is paid either quarterly or semiannually. Glossary 541

4 creditor, p. 174 Organization or person who extends credit to debtors. crossover, p. 26 Occurs when one time interval moving average graph crosses over another moving average; this is a possible signal that a stock trend reversal might be near. cubic foot, p. 482 A unit of measure by which natural gas and water are sold; it represents the amount of space occupied, not the weight. cubic function, p. 190 A function or equation raised to an exponent of three. cubic regression equation, p. 190 A third-degree regression equation of the form y = ax 3 + bx 2 + cx + d that can be used to determine the loan balance throughout the life of a loan. currency exchange rate, p. 264 A rate used to convert one country s currency to another country s currency. cusp, p. 221 On a graph, where two lines of a piecewise function meet. D daily compounding, p. 137 A method for calculating interest so that it is paid daily. daily money flow, p. 32 A calculated indicator that is the average of a day s high, low, and close, multiplied by the volume for the day. data, pp. 64, 224 A set of numbers. debit, p. 119 Withdrawals from a bank account. debit card, p. 194 A card that acts like an electronic check and is not a credit or charge card; with each purchase, the amount is deducted from a checking account; purchases may not exceed the balance in the account. debit/credit, p. 201 A debit is the amount charged to an account; a credit is payment made to reduce your debt; credits are identified by a negative ( ) sign. debt reduction plan, p. 517 A plan to improve a debt-to-income ratio by doing some or all of the following: lower debts with the highest interest rates, pay more than the minimum amount, look for ways to cut costs daily, use an online debt management calculator, make a list of what you owe and keep it handy as a reminder not to incur more debt, and slow down or eliminate your credit card spending. debtor, p. 174 Organization or person who uses credit. debt-to-income ratio, pp. 406, 517 A ratio of monthly expenses to monthly gross income; offers a realistic view as to where a person stands financially with the amount of debt presently being carried. decreasing term insurance, p. 465 A type of life insurance policy that pays a decreasing death benefits over time, and as a result, has a lower premium than other types of term insurance. deductible, p. 240 Part of the repair or damages that a driver has to pay before the insurance company pays. deferred compensation, p. 456 Money that is given or received at a later date usually in return for services that have been given or received at the present time. defined benefit plan, p. 456 An employee pension benefit that is calculated based upon a formula that may involve the average salary before retirement, the age of the employee at retirement, the length of employment, and some predetermined percentage multiplier; the employer makes all decisions on the investment options for the money in the plan. demand, p. 75 The quantity that consumers (as a whole) want. demand function, p. 75 A function that relates the quantity of a product to its price. dependence, p. 103 When x depends on y and y depends on z, it follows that x depends on z. dependent, p. 353 A person reported on a taxpayer s income tax form that a taxpayer supports financially. deposit slip, p. 116 A form to fill out when adding money to a bank account. depreciate, p. 245 Decrease in value over time. descending order, p. 225 Numbers that are in order from the greatest to the least. direct deposit, pp. 116, 296 Payroll or other types of checks that are directly and electronically deposited into a bank account. directional arrow, p. 30 Arrows that indicate whether the traded price of a single share is greater than the previous day s closing price ( ) or less than the previous day s closing price ( ). discount, p. 293 The amount that a charge, cost, or fee is lowered. discount broker, p. 40 A broker who trades stocks, but does not give investment advice. discount points, p. 411 Points that reduce the interest rate of the loan; they generally lower the interest rate about 0.25% on a fixed rate mortgage and 0.375% on an adjustable rate mortgage; these percentages vary depending upon the lending institution. distance formula, p. 260 A formula for the distance a car travels that is a function of the rate and time that it travels, or d = rt. dividend, p. 51 A corporation s profit that is split among shareholders. dividend income, p. 51 Money received because a person owns stock in a company and the company paid part of its profit to shareholders. dollar value, p. 252 Value of money that something is worth, depreciates, or appreciates. domain, pp. 70, 220 The set of all first elements,(x-values) of ordered pairs. double-time pay, p. 297 An overtime rate that is two times the hourly rate. Dow Jones Industrial Average (DJIA), p. 29 A published information system, the Dow follows the daily trading action of 30 large public companies; it is a well-respected average that offers a broad picture of how the market is performing from day to day. down payment, pp. 175, 401 The upfront money applied to a purchase that is made using a loan (credit). downtick, p. 32 A tick that indicates the price is lower than the previous trade. drag factor, p. 275 The pull of the road on the tires; it is a number that represents the amount of friction that the road surface contributes when driving. drawer, p. 116 The account owner of a check; the person who writes the check. E earnest money deposit, p. 411 The earnest money, or good-faith deposit paid to the seller by an interested buyer to show that the buyer is serious about buying the house. earning power, p. 174 A person s ability to earn money now and in the future. 542 Glossary

5 electronic funds transfer, (EFT), p. 116 The process of moving funds electronically from an account in one bank to an account in another bank; also referred to as an electronic check or e-check. Electronic Funds Transfer Act, p. 194 The law that protects debit card users against unauthorized use of their cards; users are not responsible for purchases made with a lost or stolen card after the card is report missing. electronic matrix, p. 496 A spreadsheet. electronic odometer, p. 259 An odometer which gives the distance readings digitally. electronic utilities, p. 489 Technologically advanced utilities such as Internet access, cell phones, and television. emergency road service insurance, p. 239 A type of insurance coverage that pays for towing or road service when a car is disabled. employee benefits, p. 310 Valueadded options that an employer may choose to offer employees; typically, benefits are in the forms of insurance (health, life, and disability), paid vacation time, paid holiday time, retirement plans, stock ownership plans, and childcare leave. Employee Retirement Income Security Act (ERISA), p. 457 The federal act that established protection of pension plans and the PBGC. employment agency, p. 291 A business that has lists of job openings and charges a fee to find jobs for people. ending balance, p. 123 The amount of money in a checking account at the end of a statement period. endorse, p. 117 The act of signing the back of a check when cashing it. English Standard System, p. 259 System of measurement used in the United States. envelope accounting system, p. 512 A system of using envelopes that are set up to hold the allocated amounts for weekly or monthly budget categories. equilibrium, p. 76 Where the functions of supply (what is available to be sold) and demand (the quantity that consumers want to buy) intersect. equity The amount of a home that an owner actually owns. escrow, p. 404 The money the bank collects from borrowers, for insurance and property taxes; the bank pays those bills for the homeowner when they are due. evict, p. 384 The act of legally forcing a tenant to leave a rental property for failure to pay rent or follow the rules and regulations of the lease. exemption, p. 353 Information included on tax forms that lowers taxes; exemptions include dependents as well as the taxpayer. expense equation, p. 80 The sum of the fixed and variable expenses. expire, p. 384 The time when a lease ends. explanatory variable, p. 64 In a causal relationship, the variable which causes the change in another variable. exponential base (e), p. 150 The exponential base e is an irrational number which is a nonterminating, non-repeating decimal with an approximate value of e exponential decay, p. 252 Rather than the value decreasing by the same dollar amount each year, it decreases by the same percentage each year. exponential depreciation, p. 252 The model of exponential decay in the context of auto devaluation. extrapolation, p. 70 To predict corresponding variables outside of the domain. F face value (bond), p. 54 The amount paid when a bond matures. face value (life insurance), p. 464 The amount of coverage that a life insurance policy provides. Fair Credit Reporting Act, p. 194 The law that gives protection to a consumer in the case of errors on a monthly credit card statement; consumers are not responsible for a disputed amount or the finance charges that amount accrues, until the error is resolved. Fair Debt Collection Practices Act, p. 194 The law that prohibits the creditor from harassing or using unfair means to collect the amount owed. family health care, p. 310 A type of health insurance that covers all members of the immediate family for health care bills to the extent outlined in the health care coverage plan. fast moving average, p. 26 When a stock chart depicts moving averages for two different intervals, the graph with the shorter time interval is known as the fast moving average; as changes in closing prices occur on a day-to-day basis, the fast moving average will reflect those changes quicker than the slow moving average. Federal Insurance Contributions Act (FICA), p. 316 The federal act that established Social Security insurance. fee paid, p. 291 When the employer, instead of the employee, pays the fee to an employment agency. FICA tax, p. 316 Social Security and Medicare taxes both fall in this category; the money that an employee and employer contribute to Social Security and Medicare is used to pay current benefits to others. FICO score, p. 175 A score that summarizes the probability that a debtor will pay a debt and is a reliable way that creditors judge credit worthiness. finance charge, pp. 175, 201 The interest that is charged to a buyer when paying for a purchase or service over time. finite, p. 150 Something that has an end and can be represented by a real number. fixed expenses, p. 80 Expenses that do not change based on the quantity produced, such as furniture or machinery. fixed rate mortgage, p. 401 A mortgage in which the monthly payment and average percentage rate (APR) remain the same throughout the entire loan period. flat tax, p. 335 A tax that is the same percentage or rate for everyone, such as sales tax. flexible spending account (FSA), p. 347 An employee-sponsored cafeteria plan in which employees choose to deposit funds that will be used in a specified 12-month period of time. This is a use it or lose it plan; if all of the money in the plan is not spent by the end of the 12-month period, the money cannot be returned to the employee. floor plan, p. 393 A drawing of the layout and the dimensions of rooms. foreclose, p. 401 The act by a bank of taking possession of a home when the homeowner cannot pay the mortgage. Form 1040, pp. 353, 365 A tax form used by people that have other types of income such as royalties, alimony, or prizes; also called the long form. Glossary 543

6 Form 1040A, p. 353 A short form that taxpayers can use to report their earnings and pay their taxes. Form 1040EZ, p. 353 A short form that taxpayers can use to report their earnings and pay their taxes. This form has certain requirements. Form 1099, p. 344 A form used to report other income made from interest on bank accounts, interest from stocks, and royalties. Form W-2, p. 344 A form used to report The withholding data; a Wage and Tax Statement given to employees to compute federal, state, and local income taxes; a copy of the W-2 is submitted along with tax forms. Form W-4 Employee s Withholding Allowance Certificate, p. 291 A form that is filled out by a new employee that gives directions to the government on how much money in taxes to deduct from an employee s pay. fractional part of a share, p. 48 When a split creates a situation where less than one share remains. frequency, p. 232 The number of times a particular piece of data appears in a set. frequency budget plan, p. 512 A household budget in terms of the frequency that payments or credits are made over the course of a year. frequency distribution, p. 232 A table or chart that gives each piece of data in the set and the frequency, or the number of times that it appears in the data set. front-end ratio, p. 405 A factor that banks use when deciding whether to lend money for a mortgage; a ratio of monthly housing expenses to monthly gross income. fuel economy measurement, p. 259 How much gasoline a car uses to travel a certain distance. full retirement age, p. 448 Age at which a person receives full retirement Social Security benefits. function, p. 75 A rule that assigns a unique member of the range to each element of the domain. furnished, p. 384 A rental property that has furniture included. future value of a periodic deposit investment, p. 56 The balance of an account will grow based on periodic investments; this can be calculated with the future value of a single deposit investment P ( ( 1 + r n ) nt 1 ) formula, B =, where r n B is the balance at end of investment period, p is the periodic deposit amount, r is the annual interest rate, n is the number of times interest is compounded annually, and t is the time of investment in years. future value of a single deposit investment, p. 156 The balance of an account grows to at some point in the future. G gross capital gain, p. 35 The difference between the selling price and the purchase price of a stock when the shares are sold at a greater price than they were purchased. gross capital loss, p. 35 The difference between the selling price and the purchase price of a stock when the shares are sold at a lesser price than they were purchased. gross pay, pp. 297, 344 The total pay, which is the sum of an employee s hourly pay and overtime pay. group term life insurance, p. 465 Life insurance that employees get through their employers. growth stock, p. 51 Stocks bought by investors who want to buy low and sell high. H head of household, p. 329 Special status for unmarried taxpayers who support other people besides themselves and their children. high, p. 9 The highest price one share of a particular stock was traded on a particular day. historical data, p. 252 The prices from the past that a car was worth. historical depreciation, p. 252 The devaluation of a car using historical data. hold, p. 116 The money in a bank account that is held until the issuing bank of a check pays for a check. homeowner s insurance, p. 401 Required by mortgage holders, a type of insurance that covers damage to the home due to fire and other natural disasters; also covers the contents of the home in case of theft or vandalism. hourly rate, p. 296 A set amount that an employee is paid for each hour of work. hybrid ARM, p. 419 A combination of a fixed rate period of time with an adjustable rate period of time. A 3 hybrid ARM 1 indicates that the initial interest rate is fixed for the first 3 years and then there is an adjustment period every year thereafter for the life of the loan. I impulse buying, p. 93 When a consumer purchases something to which they suddenly were attracted and had no intention of buying. income stock, p. 51 Stocks that pay dividends. income tax, p. 328 Taxes that are based on the amount of taxable income that you earn. increasing term insurance, p. 465 A type of life insurance policy that pays increasing death benefit over time and, as a result, has a lower premium than other types of term insurance. individual health care, p. 310 A type of health insurance that covers only the individual to the extent outlined in the health care coverage plan. individual retirement account (IRA), p. 438 An account that is opened by an individual, rather than sponsored by an employer. infinite, p. 150 Something without end, that cannot be represented by a real number. initial rate, p. 418 The beginning rate of an adjustable loan. installment plan, p. 175 A method of payment of a purchase or services over a period of time. insufficient funds, p. 117 When an account does not have enough money to cover a check that has been issued against it. interest (banking), pp. 117, 131 A percentage of the money that is in an account that a bank pays on some accounts. interest (credit), p. 175 The finance charge or fee that is charged to an installment buyer when paying for a purchase or service over time. 544 Glossary

7 interest rate, p. 131 The percentage rate that is paid by a bank on money that is in some accounts. interest-only mortgage, p. 407 A type of balloon mortgage where only the interest is paid in full every month. Internal Revenue Service (IRS), p. 328 Government agency that collects federal taxes. interpolation, p. 70 To predict corresponding variables within the domain. interquartile range (IQR), p. 227 The difference between the upper and lower quartiles; found by subtracting Q 3 Q 1. itemize, p. 357 When deductions are listed on an income tax form. J joint account, p. 117 An account with more than one owner where all the owners have equal access. K Keogh plan, p. 439 A retirement savings plan for a self-employed professional or the owner of a small business; pre-tax money invested in this type of account is tax-deferred until it is withdrawn. kilometers per liter (km/l), p. 259 A type of fuel economy measurement, which uses the metric system. kilowatt-hour (kwh), p. 482 A unit of measure by which electricity is sold; equivalent to 1,000 watt-hours of electrical use. L lagging indicators, p. 22 Indicators that use past data. An example is simple moving averages which investors use when they want to identify and follow a trend in prices. landlord, p. 384 The person or people that own a rented house or apartment. landominium, p. 423 Similar to a condominium, except the owner owns both the home and the land on which the home is built. last, p. 9 The price per share of the last trade that was made for a particular stock; in the newspaper, this is usually the closing price; online, it is the price of the last trade made for one share of stock. late charge, p. 201 The penalty charged for late payments from a previous month. leading coefficient, p. 86 The first coefficient in a quadratic equation when written in standard form, usually denoted by a. lease, p. 384 A written agreement between the landlord and a tenant that details the amount of rent, the length of time the apartment is to be rented, and the rules and regulations that must be followed by the tenant and the landlord. least squares line, p. 70 A line that approximates the points on a scatterplot which can be used to show a trend and make predictions; also called a line of best fit or linear regression line. lending institutions, p. 182 Organizations that extend loans; they make their profit by charging interest; lending institutions include banks, savings and loans, credit unions, consumer finance companies, life insurance companies, and pawnshops. level term insurance, p. 465 A type of life insurance policy that pays the same death benefit over the term of the policy. The premiums paid usually remain level throughout the term. liabilities, p. 516 A person s debts or amount that is owed. liability insurance, p. 238 A type of insurance that covers a person from damages; most states set minimum liability requirements. liable, p. 238 Responsible for damages caused. life insurance, p. 181 A type of insurance that pays a specified amount upon the policy holder s death.; a creditor often requires a borrower to take out life insurance to cover the loan in the event the borrower dies before the loan is paid. limit, p. 150 A concept in calculus which means an unreachable value. limited liability, p. 4 Not being able to lose any more than the value of owned shares if a corporation fails or does not make a profit. limit order, p. 40 Instructions to the broker that name a specific price for a share of stock. line graph, p. 497 A type of graph or data display that is used to depict changes over time (on a coordinate grid). line of best fit, p. 70 A line that approximates the points on a scatterplot which can be used to show a trend and make predictions; also called a linear regression or least squares line. linear regression line, p. 70 A line that approximates the points on a scatterplot which can be used to show a trend and make predictions; also called a line of best fit or least squares line. loss, p. 80 The negative difference obtained when expenses are subtracted from revenue. low, p. 9 The lowest price one share of a particular stock was traded on a particular day. lower quartile, p. 227 Q 1 is the first quartile or lower quartile, and 25% of the numbers in the data set are at or below Q 1. lump-sum payment, p. 457 Where all of the money owed to a retiree is given in a single payment and no further payments are made to either the retiree or the beneficiary. M maintenance fee (banking), p. 117 A fee that some banks charge on accounts to provide access to checking or savings accounts. maintenance fee (condo), p. 422 A fee paid monthly by condo owners and used to hire workers to maintain common areas, such as lawns, outside walls, decks, roofs, sidewalks, and roads. market capitalization or market cap, p. 45 The total value of all of a company s outstanding shares. market value, p. 401 The amount that a house can be sold for. markup, p. 76 The amount that retailers add on to the wholesale price of an item. married filing jointly, p. 329 Filing status for married taxpayers who chose to fill out separate income tax returns. married filing separately, p. 329 Filing status for married taxpayers who chose to fill out one income tax return together. matrix, p. 496 A rectangular array of information consisting of rows and columns. mature, p. 54 When a bond is due for repayment to the bondholder. maturity, p. 132 A specified date at which interest is paid on a CD. maximum profit, p. 97 The greatest difference between revenue and expense. maximum taxable income, p. 316 The maximum income on which a person must pay Social Security tax in a given year. 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8 maximum value, p. 87 The peak or vertex of a parabola; the point where revenue can be maximized. mean, pp. 196, 225 Often referred to as average; the sum of all the numbers in a data set divided by the number of elements in the data set. measures of central tendency, p. 224 Single numbers, such as the mean, median, and mode, designed to represent a typical value for the data. mechanical odometer, p. 259 An odometer that consists of a set of cylinders that turn to indicate the distance traveled. median, p. 225 The middle number when numbers are in ascending or descending order. Medicare tax, p. 316 The amount of Medicare tax an employee pays is a set percentage of the entire income with no maximum amounts; the amount paid is split between the employee and employer. meter, p. 482 A device that records how much of a particular utility is used. metric system, p. 259 System of measurement used in other countries outside of the United States. middle ordinate, p. 277 A segment drawn from the center of a chord to the arc of a yaw mark; this perpendicular segment is used to find the radius of a circle. miles per gallon (mpg), p. 259 A type of fuel economy measurement, which uses the English Standard system. minimum balance, p. 132 A certain amount of money that must be kept in an account as required by that particular bank. minimum payment, p. 201 An amount that is the lowest payment the credit card company will accept for the current billing period. minimum wage, p. 297 The hourly rate that federal law allow as the least hourly rate be paid to an employee in the United States. mode, p. 228 The most often occurring value in a data set; there can be more than one mode or no modes at all. moderate correlation, p. 70 Correlations that are not strong or weak. modified boxplot, p. 235 A special type of boxplot that shows all the numbers that are outliers as single points past the whiskers. money flow, p. 32 A type of market analysis known as money flow. money market account, p. 132 An account that pays a higher interest rate than other types of accounts, but usually requires a higher initial deposit and a higher minimum balance often with a limit on the number of transactions per month. Monte Carlo method, p. 397 A way to find area; the theory is that the ratio of points that land inside the region to the total points should equal the ratio of the area of the irregular region to the area of the rectangle; the more points used, the more accurate the approximation monthly, p. 296 Twelve times a year. monthly payment calculator, p. 187 A way to calculate information about the balance over the lifetime of the loan and on a monthly or yearly basis. monthly periodic rate, p. 201 The APR divided by 12; the rate of interest charged each month. mortality table, p. 464 A table that lists death rates according to age groups. mortgage, p. 401 A loan taken out by people to purchase a house. N NASDAQ, p. 9 A stock market called the National Association of Securities Dealers Automated Quotation System. natural logarithm, p. 189 An exponent of the power to which a base number must be raised to equal a given number; a natural logarithm is a logarithm where e, which is represented by a non-terminating, non-repeating decimal , is the base. negative correlation, p. 64 When the value of one variable decreases as the value of the other variable increases. negative money flow, p. 32 When stock is purchased on a downtick. negligent, p. 238 At fault for damages caused. net change, p. 10 Abbreviated Chg; shows the change between the previous day s closing price and the current day s closing price; it can be expressed as a dollar amount or a percentage; a positive change indicates the current day closed at a greater price than the previous day; a negative change indicates the current day closed at a lesser price than the previous day. net money flow, p. 32 A positive flow of money because more investors were willing to pay a price above the market price. net pay, p. 344 The amount of money a worker takes home after deductions. net proceeds, p. 40 The amount of money made on a stock trade after the brokerage fees are paid. net worth, p. 512 The difference between a person s assets (what is owned) and that person s liabilities (what is owed). new balance, p. 201 The amount currently owed on a credit card. new purchases, p. 201 The sum of purchases or debits on an account. no-fault insurance, p. 239 Same as PIP, or personal injury protection. nonlinear function, p. 86 A function that has a graph that is not a straight line. non-recurring costs, p. 411 Costs that occur only once. number of days in billing cycle, p. 201 The amount of time, in days, covered by the current bill. NYSE, p. 9 A stock market called the New York Stock Exchange. O odd lot, p. 35 A group of stocks that is less than 100 shares. odometer, p. 259 A gauge on the dashboard of a car that indicates the distance the car has traveled since it left the factory. Old-Age, Survivors, and Disability Insurance (OASDI), p. 449 An insurance that pays benefits to retired workers that help them meet their financial obligations and provides benefits to families of retired workers and disabled workers under certain conditions. order of a matrix, p. 497 The number of rows and columns in a matrix; the order is reported using the form row column (read row by column ). origination fee, p. 411 This fee is money paid to the lending institution for the paperwork involved in the loan application process. 546 Glossary

9 origination points, p. 411 Similar to origination fees that are collected from the buyer as a means of paying for the loan application process. outlier, p. 225 Numbers in a data set that are extreme values; calculate outliers in a data set by multiplying 1.5 times the IQR; subtract this product from Q 1 to compute the boundary for lower outliers and add this value to Q 3 to compute the boundary for upper outliers. outstanding checks, p. 123 Checks that do not appear on the bank statement. outstanding deposits, p. 123 Deposits that do not appear on the bank statement. outstanding shares, p. 45 The total number of all shares issued to investors by a corporation. overdraft protection, p. 117 Protection pays a check even though there are not enough funds in the account; there is a fee for this service and the money must be repaid. overtime hourly rate, p. 297 The hourly wage an employee receives for any overtime hours. overtime hours, p. 297 The extra hours an employee works beyond their regular hours. P paid holiday time, p. 310 Paid time off for holidays that an employer may offer to employees as an employee benefit. paid vacation time, p. 310 Paid time off that an employer may offer to employees as an employee benefit. parabola, p. 86 The shape of the graph of a quadratic function. partnership, p. 4 A business that is owned by more than one person; partners are each personally liable for the business. pay stub, p. 344 A list of wages and the amounts deducted from a paycheck that can be detached from the actual paycheck. paycheck, p. 344 A form of payment to employees for their work. payee, p. 116 The receiver of the transferred funds or the person to whom the check is written. payment due date, p. 201 The due date, or the date the monthly payment must be received by the creditor. payments, p. 201 The total amount received by the creditor that is applied to the account. penny stock, p. 46 A stock whose value is less than $5 per share. Pension Benefit Guaranty Corporation (PBGC), p. 457 A federal government agency that insures most defined benefit pension plans. Pension Protection Act, p. 457 The act which amended ERISA and offered legislation to strengthen and protect many types of pensions. pension, pp. 310, 456 A type of retirement plan where an employee receives compensation from an employer after retirement. perimeter, p. 396 The sum of all the side lengths of a figure. periodic investment, p. 156 The same deposits made at regular intervals, such as yearly, monthly, bi-weekly, weekly, or even daily. personal injury protection (PIP), p. 239 An added type of insurance coverage mandatory in some states, that pays for any physical injuries that the driver or the passengers sustain while in the vehicle, even if there is no traffic accident; sometimes called no-fault insurance. personal identification number (PIN), p. 117 A password that allows access to an ATM. personally liable, p. 4 A business owner who is personally responsible for the debts of the business whether or not there is a profit. pie chart, p. 497 A pie chart is a graphic display in the form of a circle divided into pie-shaped sectors that are used to present data in percentages. piecewise function, p. 220 Also called a split function; it gives a set of rules for each domain of the function; c(x) is computed differently depending on the value of x. piecework rate, p. 303 The set amount of money that a worker receives for each item the individual produces. pieceworker, p. 303 A type of worker who is paid for each item the employee produces. points, p. 411 Extra fees charged by the lending institution for the use of their money; each point is equivalent to 1% of the loan amount. portfolio, p. 35 A grouping of all the stocks that an investor owns. positive correlation, p. 64 A relationship where the value of one variable increases as the value of the other variable increases. positive money flow, p. 32 When stock is purchased on an uptick. preferred stock, p. 51 Preferred stockholders received dividends before common stockholders. premium, pp. 464, 238 The amount paid for an insurance policy. prepaid interest, p. 411 Interest starts accruing (building) at the beginning of each month and continues throughout the month; prepaid interest at the closing is the amount of mortgage interest due to cover the time from the closing date to when the first mortgage payment is due. prepayment penalty, p. 181 An amount borrowers pay as a fee if they wish to pay back an entire loan before the due date. prepayment privilege, p. 181 An agreement that allows the borrower to make payments before the due date to reduce the amount of interest. present reading, p. 483 The current meter reading. present value of a single investment, p. 161 The value, which can be calculated, for how much a one-time deposit should be at a specific interest rate in order to have a certain amount of money saved for a future savings goal; this can be calculated using the present value of a single investment formula; P = B ( 1 + r n ) nt, where B is the balance at the end of investment period, p is the periodic deposit amount, r is the annual interest rate, n is the number of times interest is compounded annually, and t is the time of investment in years. present value of a periodic deposit investment, p. 161 A determination to find how much to save on a regular basis at a specific interest rate to meet a future goal; this can be calculated with the present value of a periodic deposit investment formula; P = B r n ( 1 + r n ) nt 1, where B is the balance at the end of the investment period, p is the periodic deposit amount, r is the annual interest rate, n is the number of times interest is compounded annually, and t is the time of investment in years. 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