Enter the principal, interest rate, and time period into the calculator to determine the pre-judgment interest.

Pre-Judgment Interest Calculator

Enter principal, rate, and dates to compute simple pre-judgment interest (Actual/365).

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Pre-Judgment Interest Formula

The following equation is used to calculate the Pre-Judgment Interest.

PJI = P * r * t
  • Where PJI is the pre-judgment interest ($)
  • P is the principal ($)
  • r is the interest rate (decimal)
  • t is the time period (years)

To calculate the pre-judgment interest, multiply the principal by the interest rate by the time period.

What is a Pre-Judgment Interest?

Definition:

Pre-judgment interest is the interest accrued on a monetary claim from the time the claim arose until judgment is entered, compensating the claimant for the loss of use of the money during that period.

How to Calculate Pre-Judgment Interest?

Example Problem:

The following example outlines the steps and information needed to calculate the Pre-Judgment Interest.

First, determine the principal amount of the claim. In this example, the principal is $10,000.

Next, determine the annual interest rate and time span. Here, the interest rate is 5% (0.05 per year) and the time span is 2 years.

Finally, calculate the interest using the formula above:

PJI = P × r × t

PJI = 10,000 × 0.05 × 2

PJI = $1,000

FAQ

When is pre-judgment interest typically awarded?

Pre-judgment interest is generally awarded in civil cases where a monetary claim is proven, ensuring that the claimant is compensated for the time they were without the disputed funds. However, its availability and calculation vary by jurisdiction and specific legal statutes.

How is the interest rate for pre-judgment interest determined?

The interest rate for pre-judgment interest can be specified by statute, contract, or court decision. It may be a statutory rate set by law, or it could be based on a particular benchmark, such as the prime rate.

Does pre-judgment interest always apply?

Whether or not pre-judgment interest applies depends on the type of legal claim, relevant laws, and the discretion of the court. Some jurisdictions or case types may not grant pre-judgment interest or only award it for certain types of damages.