Why Do Inflation and Interest Rates Play Such a Big Game?

Imagine you're saving up to buy a toy. If the price of the toy goes up, that’s like inflation, it feels harder to save up. Now, if your parents get extra money from the bank, that's interest rates, it might be easier for you to afford the toy. Inflation and interest rates are like two players in an invisible game with your money.

Take the quiz →

Examples

If a cookie costs $1 today, it might cost $1.20 next year, that’s like the price of cookies going up because of inflation.
When your parents take out a loan at a higher interest rate, they pay back more money over time.
Higher interest rates make saving money feel more rewarding.

Ask a question

Discussion

Recent activity

Categories: Economics · inflation· interest rates· economy· money· finance