You understand inflation is prices in general rising over time, so the same money buys less; idle money can lose value.
Let’s explore
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Inflation is when prices in general rise over time.
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A bowl of pho was cheaper 10 years ago — that is inflation. The same money buys less.
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Because of inflation, money sitting idle can lose value — so save and invest wisely.
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The essence: If prices rise 5%/year, a 100,000d item next year is 100,000 × (1 + 5/100) = 105,000d. Your money is unchanged but buys less — that is why we save and invest.
Practice activity
💬 Ask your grandparents: how much did a loaf of bread cost back in their day?
Worked example: You ask Grandma: “When you were young, how much was a loaf of bread?” — “About 500 dong.” Now a loaf is 15,000d. Same bread, much higher price — that is inflation over decades.
Quick quiz
1. Inflation is?
→ Prices in general rising over time
2. With inflation, the same money buys?
→ Less
3. Because of inflation, idle money can?
→ Lose value
4. Price 100,000d, inflation 10%/year, next year price?
→ 110,000d
5. A bowl of pho was cheaper 10 years ago due to?
→ Inflation
6. Because of inflation, a long-term saving goal should?
→ Add a bit for rising prices
🎯 Real-life mission
Ask family what an item cost 10 years ago versus now.