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Explain How Inflation Affects Savings

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Essay

Explain how inflation affects savings.


Definitions:

New Capital

Funds or resources accumulated for the purpose of investment in new projects, expansion of operations, or renewal of facilities.

Investment

Investment involves allocating resources, usually financial, with the expectation of generating an income or profit, often through the purchase of assets designed to grow in value over time.

Interest Rate

The proportion, usually expressed as a percentage, of a loan that is charged as interest to the borrower, typically expressed on an annual basis.

Interest Rate

The percentage at which interest is charged or paid on a sum of money over a period, typically expressed as an annual percentage rate.

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