Answer:
It will increase by 0.2%.
Step-by-step explanation:
In this problem we need to solve for the monthly interest first.
We use the formula:
[tex]r = (1+\dfrac{i}{n})^{n}-1[/tex]
Now that we have the formula we now define our variables.
i = 20.87% or 0.2087
n = 12
[tex]r=(1+\dfrac{0.2087}{12})^{12} - 1[/tex]
[tex]r=(1+\dfrac{0.2087}{12})^{12}-1[/tex]
[tex]r=(1+\dfrac{0.0174})^{12}-1[/tex]
[tex]r=(1.0174})^{12}-1[/tex]
[tex]r= 1.2299-1[/tex]
[tex]r= 0.2299[/tex] or 23%
Now we have to find the daily interest rate.
[tex]r=(1+\dfrac{0.2087}{365})^{365}-1[/tex]
[tex]r=(1+\dfrac{0.2087}{365})^{365}-1[/tex]
[tex]r=(1+0.00057178082)^{365}-1[/tex]
[tex]r=(1.00057178082)^{365}-1[/tex]
[tex]r= 1.2320-1[/tex]
[tex]r= 0.2320[/tex] or 23.20%
23.20% - 23% = 0.20% increase.
