> For the complete documentation index, see [llms.txt](https://ionian.gitbook.io/mendi-finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://ionian.gitbook.io/mendi-finance/protocol/interest-rate-model.md).

# Interest Rate Model

## Borrow APR

The interest rate model for borrowed assets can be calculated using the following formula:

\
\= Base + Multiplier \* min(UtilizationRate, Kink) + max(JumpMultiplier \* UtilizationRate - Kink, 0)

## Supply APR

The interest rate model for supplying assets can be calculated using the following formula:

\= Distribute (Interest Paid by Borrowers Per Block - Reserve) to all suppliers, and convert it into APY

\= Distribute \[(1 + Borrow APY) ^ (1 / BlocksPerYear) - 1] \* Total Borrow \* (1 - Reserve Factor) to all suppliers, and convert it into APY

\= {\[(1 + Borrow APY) ^ (1 / BlocksPerYear) - 1] \* Total Borrow \* (1 - Reserve Factor) / Total Supply}, and convert it into APY

\= {1 + \[(1 + Borrow APY) ^ (1/BlocksPerYear) - 1] \* Total Borrow \* (1 - Reserve Factor) / Total Supply} ^ BlocksPerYear - 1