why does higher inflation translate to higher interest rates?

Answer 1

Even if we assume no inflation, and no risk to the loan, a rational lender is going to want some benefit for losing access to his money for the period of the loan. This is what is generally referred to as the risk free rate, and is the lowest rate generally available (and even then only to large very credit worthy institutions, like the federal government).
When we add in the element of inflation, the amount the borrower must pay back increases in nominal terms, since not only does he have to repay the principal and the cost of losing access to his money for the term of the loan, he also has to recover the loss of value caused by inflation. Generally, lenders do not break out the cost of the loan itself from the loss of purchasing power of the money over the term of the loan, which is why a higher inflation rate translates to higher interest rates.
If, for example, the intrinsic cost of borrowing money was 5% per year, and inflation was 5% per year, then in order to see a real return on his investment, the lender would have to charge both the inflation rate and the cost of money. In this case, the interest rate on the loan would be (1.05)X(1.05)=1.1025. If the lender did not charge for the inflation during the time of the loan, he would not make any money, and therefore would have found an alternative way to invest his money.
Hope this helps.

Answer 2

higher inflation will causes higher quantity of greenback' simultaneously, it causes a shortage of supply of credit on the money, which translate into higher interest rates.

also since higher interest rates will cause investor's required rate of return to increase, companies will be less willing to pay such premium.

I have to add one more thing

3 things that make up investor's required rate of return
-real
-inflation
-risk

example real-2%, inflation 4%, and risk 5%=11%
thus higher inflation = higher interest rates.

Answer 3

If you borrow money to buy something that you think will be worth 10% more next year you would be willing to pay a higher interest rate than if you expected no increase in the value.

Answer 4

Inflation means there is too much money in circulation. To reduce the money of circulation, the FED increases interest rates so banks don't borrow as much money. Making cash more costly to attain will give incentives to put money in other places, such as: mutual funds, stocks, gold, real estate, etc.