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Interest Model of \$DeFi
Rather than wallet providers or debtors having to barter over phrases and fees, the BNB DeFi makes use of an interest charge version that achieves an interest charge equilibrium in every cash marketplace, primarily based totally on delivery and demand for Following the financial theory, interest fees (the “price” of cash) need to grow as a characteristic of demand for while demand is low, interest fees need to below, and vice versa while demand is high. The usage ratio U for every marketplace unifies deliver and demand right into a single variable: U(a) =Borrows a/ (cash a+ Borrow a)
The demand for the curve is codified thru governance and is expressed as a characteristic of usage. As an example, borrowing interest fees can also additionally resemble the following: Borrowing Interest Rate = 2.5% + U a * 20%

## Simple Interest Equation (Principal + Interest)

A = P(1 + rt)
Where:
• A = Total Accrued Amount (principal + interest)
• P = Principal Amount
• I = Interest Amount
• r = Rate of Interest per year in decimal; r = R/100
• R = Rate of Interest per year as a percent; R = r * 100
• t = Time Period involved in months or years
From the base formula, A = P(1 + rt) derived from A = P + I and since I = Prt then A = P + I becomes A = P + Prt which can be rewritten as A = P(1 + rt)
Note that rate r and time t should be in the same time units such as months or years. Time conversions that are based on day count of 365 days/year have 30.4167 days/month and 91.2501 days/quarter. 360 days/year have 30 days/month and 90 days/quarter.

## Interest Formulas and Calculations:

A = the Final Investment Value, using the simple interest formula: A = P(1 + rt) where P is the Principal amount of money to be invested at an Interest Rate R% per period for t Number of Time Periods. Where r is in decimal form; r=R/100; r and t are in the same units of time.
The accrued amount of an investment is the original principal P plus the accumulated simple interest, I = Prt, therefore we have:
A = P + I = P + (Prt), and finally A = P(1 + rt)
• Calculate Total Amount Accrued (Principal + Interest), solve for A
• A = P(1 + rt)
• Calculate Principal Amount, solve for P
• P = A / (1 + rt)
• Calculate rate of interest in decimal, solve for r
• r = (1/t)(A/P - 1)
• Calculate rate of interest in percent
• R = r * 100
• Calculate time, solve for t
• t = (1/r)(A/P - 1)