# Borrow Rate
The price of a particular currency freely floats and is determined by supply and demand. This means that Mor bonds typically trade at prices below their face value. This discount, along with the time to maturity, can be used to infer the yield—the annualized interest rate earned by purchasing Mortonn and holding it until maturity—just as you would infer the interest rate from bond prices.
Suppose the face value of 1 dollar is 1 dollar from today until maturity, but the current trading price is $0.50. If you invest $1 in these dollars, you can buy 2 of them, and from today, you can get 2 dollars' worth of BNB. Therefore, the yield on these currency dollars (and the implied interest rate for the 1-year "loan") is 100%.
There is a simple formula to calculate the annualized yield Y of any Mortonn (where F is the face value, P is the present value, and T is the number of years to maturity):
Unlike traditional interest rate swaps, the fixed leg is effectively prepaid when users sell BNB at a discounted price. This limits the leverage they can achieve. For example, in the above case, a 1 dollar face value asset maturing in 3 months has a trading price of $0.97. This means the annualized yield is approximately 13%.
Short-term Mortonn yields can serve as an indicator of spot asset lending rates. This can be used as input to inform protocols that choose to pay interest rates, such as MakerDAO and Compound. If the price can be determined on-chain, it can be used for determining on-chain interest rate derivatives (such as swap transactions).
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