I guess this is the code that does it:

  auto new_steem = ( props.virtual_supply.amount * current_inflation_rate ) / ( int64_t( STEEM_100_PERCENT ) * int64_t( STEEM_BLOCKS_PER_YEAR ) );
  auto content_reward = ( new_steem * props.content_reward_percent ) / STEEM_100_PERCENT;
  if( has_hardfork( STEEM_HARDFORK_0_17__774 ) )
     content_reward = pay_reward_funds( content_reward );
  auto vesting_reward = ( new_steem * props.vesting_reward_percent ) / STEEM_100_PERCENT;
  auto sps_fund = ( new_steem * props.sps_fund_percent ) / STEEM_100_PERCENT;
  auto witness_reward = new_steem - content_reward - vesting_reward - sps_fund;

So, they create new_steem as a percentage of virtual_supply, and then split that up into content rewards, vesting rewards (interest), SPS funding, and witness rewards.

The pieces that converts author rewards and SPS funding to SBDs happen a bit later.

Over the year, then, the virtual steem supply will increase by ~32,689,312 (466990176 * 0.07), and that will be split among VESTS, STEEM, and SBDs. But token burning and SBD -> STEEM conversion can also alter the mix, and it's also effected by the changing price of STEEM.