The rate of interest a firm pays on borrowed money increases from 6.8% to 8.6% By what % did the rate increase

Question

How do I calculate that?

Answer 1

The rate increased by (6.8 - 8.6)/6.8 x 100 = 26.47%. You can counter-check it by a simple example. Say you have $1,000 and the interest was 6.8% = $68 but was increased to 8.6% = $86. The increase is $18. $18/$68 = 26.47%. You divide by $68 and not $86 cos $68 was your starting point, your base.