# Interest

#### How are interest rates calculated for each trove?

Interest rates differ per collateral, and a user's interest rate depends on their collateral makeup. Imagine collateral 1 comprises 25% of a user's trove, and collateral 2 comprises 75%. C1 has an interest rate of 1%, and C2 has an interest rate of 2%. The user's composite interest rate would be: 25% \* 1% + 75% \* 2% = 1.75%. So, their debt would be charged 1.75% per day, until they adjust their trove and their ratios can change. 

**When is interest applied?**

Interest rates are applied once per day autonomously. This means that once one day has passed, the next action in the protocol will apply interest, for everyone. 

There is also an external function which anyone can call to tick the interest, once a day has passed.