A lender demands an interest rate in part to compensate for any expected , so that the money that is repaid in the future will have at least as much buying power as the money that was originally loaned.

inflation

Explanation:

The real interest rate charged on a loan = nominal interest rate - inflation rate

The inflation rate is the change in the general level of prices, and as the inflation rate increases, the purchasing power of the currency decreases. For example, if you purchase 50 cans of Coke with $50 this year, and the inflation rate is 10%, you will only be able to purchase only 45 cans next year with the same $50.

answer; the correct answer to the above statement is (true);