S.L.
That is a very good price (and generous). In my area, most home daycares are charging between $135 - $150 per week (and you pay if they are there or not, and some take paid vacation time too), but they are licensed so the parents do get a little tax break at the end of the year. The daycare facilities in my area for a newborn range from $200 - $275 a week (again, you pay if they are there or not). The ladies around me, who are not licensed - but watch one or two other children besides their own for some extra cash, charge between $80 - $100 a week (and you only pay on the days they are there).
I wouldn't go down at all...she's trying to take advantage of you... because her other options are going to be a lot higher, and her child won't be getting as much attention at a facility it will with you.She should recognize $20 a day as a great deal and not be so greedy.