Respuesta :
Answer:
Inflation is the continuing reduction of the purchasing power or price level rise in a given time period.
Therefore, keeping money in a savings account that gives an interest rate that is lower than the inflation rate, in a period of high inflation will result in a reduction of the purchasing power of the amount of money plus interest in the savings account.
If the interest rate is 10%, the amount, A, in the account after a given time will be 1.1A
If the inflation rate is 15%, the value of the goods sold initially at A, will become 1.15A after the given period and the amount in the account will no longer be able to purchase the goods it was initially able to purchase, or the amount in the savings account will lose value
Step-by-step explanation:
In this exercise, we have to know some finances concepts in order to explain the problematized situation in this way we can say that:
Inflation exist the ongoing decline of the ability to purchase or price level rise fashionable a likely time period.
Explaining this concept of finance in a deeper way, we find that:
Inflation exist the ongoing decline of the purchasing power or price level rise fashionable a likely an age.
Therefore, consistency services in a account for saved money that gives an sum charged for use of money that is to say inferior the swelling rate, in a period of extreme swelling will influence a decline of the ability to purchase of the amount of services plus interest in the account for saved money.
If the sum charged for use of money exist 10%, the amount, A, fashionable the or charges after a likely opportunity will exist 1.1A
If the swelling rate exist 15%, the value of ability sold out at first at A, will evolve into 1.15A following in position or time the given extent of time and the amount fashionable the or charges will not any more within financial means purchase the goods it exist at first able to perform well to purchase, or the amount fashionable the account for saved money will lose value
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