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!
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.
Answered Jan 17, 2015
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Answered May 26, 2019
Hi Denny, you can easily get this info and many more on Flash Financial guide. This website has helped me a lot throughout my finance career. Also, I follow these tips for my personal life and it turned out in the best way possible.
Answered Sep 07, 2021

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