Based on the explanation below, the most likely thing to happen to the purchasing power of his savings over time is to fall.
Purchasing power can be described as the amount of goods and services that a unit of currency or an amount of money can purchase.
The relationship between interest rate and inflation rate affects the purchasing power of a saving account.
When the interest rate is higher than the inflation rate, purchasing power increases.
But when the interest rate is lower than the inflation rate, purchasing power falls.
For example, for the 12 months ending April 2022, the annual inflation rate in the United States was 8.3%.
Since the 0.5% annual interest rate being earned by Daniel is lower than the 8.3% annual inflation rate, the most likely thing to happen to the purchasing power of his savings over time is to fall.
Learn about savings accounts here: https://brainly.com/question/14011926.
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