Need help with inflation / interest rate problem?

I was doing a homework problem on how inflation would affect savers and borrowers, but I don't get how savers would be hurt if they receive a fixed-interest-rate. Suppose that I'm a saver and have $100 in my bank and getting 5% interest payed to me, there is a 20% inflation, how would that hurt me? Inflation causes prices of items and services to go up, but my interest rate won't change if it is fixed?? I'm confused, somebody help me please!
dennyyildiz35
Asked Jan 03, 2015
yes right, once your interest rate is fixed that will never be change. if you are going to save your money and have an interest over a year then you are going to buy something that could have another interest for the actual price.
katerichards
Answered Jan 17, 2015
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abdullahibrahim
Answered May 26, 2019

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