Tang Fixed
Mr. and Mrs. Tang have recently paid off the mortgage on their home and have retired on Social Security.?
They have $50,000 in saving and loan certificate of deposit (CD)
Mr. and Mrs. Garcia have recently purchased a home and are making monthly payments on a fixed-rate mortgage. They operate a small, but sucessful, auto repair business. They purchased the business with a fixed-rate Small Business Loan which they are in process of paying off.
Which couple will most likely be hurt by inflation? Which couple will most likely benefit?
*Im going for the first couple, since the second couple is on a fixed rate I dont think they would be affected by inflation. Please give me your opinions. Thanks!
You are right
Couple one has fixed income (CD interest) which will be worth less as inflation rises.
Couple two has fixed expenses (Mortgage and SB loan) which are better deals as inflation rises. Also they could raise their income from the Auto repair place by raising prices as inflation increases.
Knife review: fixed blades by Puma, Boker Plus and Le Camarguais (and a Kiku as extra)
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