What is the calculation rule of interest?

Deposit interest rate

• After the user deposits a certain token, the deposit interest will be calculated according to the real-time deposit APY of the token. The exchange rate of bToken will be updated.
• When the user withdraws the deposit, the system uses the exchange rate of bToken to calculate the capital and interest that the user deserves.
• Deposit APY = loan annualized rate × utilization rate × (1-reserve factor)

Loan interest rate

• After the user borrows a certain token, the loan interest rate will be calculated according to the real-time loan annualized rate of the token.
• Loan interest is calculated based on the token of the loan.
• During the unpaid loan period, the loan interest generated will have an impact on the health factor, and the health factor will gradually decrease until 1 to trigger liquidation.
• When the current utilization rate is less than the target utilization rate, the loan annualized rate= initial rate R0 + (current utilization rate/target utilization rate)/ maximum rate R1.
• When the current utilization rate is bigger than the target utilization rate, the loan annualized rate= initial rate R0 + maximum rate R1 + (current utilization rate-target utilization rate) / (1- target utilization rate) * maximum rate R2.