Question

How does saving money in an account with compound interest help protect you from inflation?

Answer 1

Answer:

Inflation is caused by the increase in prices of goods, and as prices of goods rise, the value of money itself would decrease. By saving money in a savings account with interest that might be equal or more than the level of inflation, your money would increase, which protects you from the devaluation of the savings you hold and the rising prices of goods.