It follows that the nominal interest rate, which is offered by banks, is not the best basis for evaluating the real value of your gains. If the inflation rate is, let's say, 2%, then the real value of the money in your account is approximately only $1,010. So, even though you will have $1,030 in your account, each one of these dollars will be worth a bit less than it was a year earlier. It is likely that the general price level will change during the year, which will affect the real value of your money. However, this is only a nominal value that is not necessarily equal to its real value. For example, if you have $1000 in a savings account with a 3% interest rate, you will have $1030 in your account after a year. These often have a given interest rate, which causes our savings to increase from an initial value to a future value. Rather, we prefer to keep our savings in bank accounts or invest them. We don't normally keep money in a locked box. For the sake of simplicity, let's assume that the price index was 100 in 2015 and 105 in 2016.
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