When a court awards money damages, interest often accrues on the judgment from the date it is entered until it is paid. This ensures that the prevailing party is compensated for the time value of money. Knowing how much interest is owed helps attorneys advise clients on settlement offers and payoff amounts. Our calculator simplifies the computation so you can focus on negotiating or closing the case.
The principal is the amount of the judgment itself, excluding costs or attorney fees. The annual interest rate may be set by statute or by the court. The judgment date marks when interest begins to accrue, and the payment date is when you expect to satisfy the judgment. By plugging in these variables, you can estimate the total interest due for the period.
This calculator uses simple interest, computed as principal × rate × days/365. Some jurisdictions use 360 days in a year or apply compound interest. Always check your local rules to verify the exact formula. If your case involves a partial payment or periodic accrual, you may need to adjust the result accordingly.
Start by entering the principal amount of the judgment. Next, input the annual interest rate, typically expressed as a percentage. Then select the judgment date and the anticipated payment date. Click "Calculate Interest" to see how much interest will accumulate between those dates. If you need to share the result with a colleague or client, simply press the copy button.
Assume a $10,000 judgment with a 5% annual interest rate entered on January 1. If payment is made on December 31 of the same year, there are 365 days of interest. The calculation is $10,000 × 0.05 × 365 / 365, resulting in $500 of interest. If payment is delayed another six months, simply change the end date and recalculate to account for the additional days.
Interest rates on judgments vary widely. Some states set a fixed statutory rate, while others tie it to the federal prime rate or Treasury yields. Judgments in federal court may use a different standard than state courts. This calculator does not replace official guidance, but it offers a quick approximation so you can assess the potential cost of delay.
Keep careful records of interest calculations, especially if the judgment spans multiple years or partial payments. Document the principal, the dates, and the interest rate used. When payments are made, note how much was applied to interest versus principal. Accurate bookkeeping prevents disputes later and demonstrates professionalism.
Interest can significantly increase the amount owed on a judgment. When negotiating a settlement, parties may agree to waive some interest in exchange for faster payment. Having an exact figure in mind gives you leverage and helps you craft fair proposals. It can also motivate debtors to resolve the matter quickly, saving everyone time and expense.
Whether you are a seasoned attorney, a self-represented litigant, or a business owner managing collections, understanding judgment interest is crucial. Use this calculator to get a quick estimate, then consult your local rules for precise guidelines. Prompt payment saves money and encourages efficient resolution.
Because interest rules can change over time, keeping up with statutory updates and court decisions is wise. Bookmark this page and return whenever you need a quick refresher or a fast calculation.
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