I’m a bit confused by what you’re trying to say here. It seems non sequitur if you are trying to say “borrowers of higher interest rate benefit less from inflation”.
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Your maths is not right. Inflation, in absolute terms, is a larger benefit to people with higher interest rates.
Let’s consider the scenario where inflation is 10% for simplicity, and two borrowers who each borrow $100, but Borrower A at 5% annual simple interest and Borrower B at 25% annual simple interest. Both borrowers borrow the money at the beginning of Year 0.
Borrower A owes $105 in Year 1 dollars at the beginning of Year 1. This is equivalent to $95.45 in Year 0 dollars.
Borrower B owes $125 in Year 1 dollars at the beginning of Year 1. This is equivalent to $113.64 in Year 0 dollars.
Compared to a 0% inflation rate, Borrower A saved 9.55 Year 0 dollars and Borrower B saved 11.36 Year 0 dollars. Borrower B saved 1.81 more Year 0 dollars than Borrower B due to inflation (but paid 17.55 Year 0 dollars more overall because of interest).
Inflation reduces the real buying power of the money used to repay the loan by the inflation rate each year, regardless of your loan interest.
In absolute terms, inflation is better the higher your interest rate is, because the number of dollars it saves you goes up.
NateNate60@lemmy.worldtoMicroblog Memes@lemmy.world•The great millennial garbage gyreEnglish8·2 days agoSomeone tried this with a dating app for right-wingers only called “The Right Stuff”, which has faced significant criticism for lacking female users.
NateNate60@lemmy.worldto politics @lemmy.world•NY Times cited 29 times to justify decision limiting trans healthcare43·11 days agoImportant distinction: it was cited 29 times [by non-parties to the case who filed amicus briefs carrying no legal weight].
It was not cited 29 times in the actual ruling.
This meme reminded me to turn on my alarm. I turned it off last Wednesday for Juneteenth and the Monday and Friday alarms are separate (less road congestion, can wake up later). So if not for this, I would have overslept tomorrow morning
So what did you mean when you began your comment with “actually it’s the inverse”? Inverse of what?