Judgment Interest Calculator

What is Judgment Interest?

Judgment interest is the additional amount that accrues on a court-ordered judgment from the date it is entered until it is paid in full. This interest is designed to compensate the judgment creditor for the delay in receiving payment and to encourage prompt payment by the judgment debtor.

The Judgment Interest Formula

The formula for calculating judgment interest is:

\[A = P(1 + r \times t)\]

Where:

• \(A\) = Final amount
• \(P\) = Principal (judgment) amount
• \(r\) = Daily interest rate (annual rate divided by 365)
• \(t\) = Number of days

Step-by-Step Judgment Interest Calculation

1. Identify the judgment amount (P), annual interest rate, and number of days (t).
2. Convert the annual interest rate to a daily rate by dividing by 365.
3. Convert the daily rate to decimal form (divide by 100).
4. Plug these values into the judgment interest formula.
5. Calculate the final amount (A).
6. Subtract the principal from the final amount to get the interest accrued.

Example Calculation

Let's calculate the judgment interest for a judgment of $10,000, with an annual interest rate of 5%, over 365 days:

1. \(P = \$10,000\), annual rate = 5%, \(t = 365\) days
2. Daily rate = \(5\% \div 365 = 0.0136986\%\)
3. Daily rate in decimal = \(0.0136986\% \div 100 = 0.000136986\)
4. \(A = 10000(1 + 0.000136986 \times 365) = \$10,500\)
5. Interest accrued = \$10,500 - \$10,000 = \$500

Visual Representation

The green portion represents the original judgment amount ($10,000), and the blue portion represents the judgment interest accrued ($500).