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Pre Judgment Interest Formula:
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Pre judgment interest in NSW is interest that may be awarded on a money judgment for the period from when the cause of action arose to when judgment is entered. It compensates the plaintiff for being kept out of their money during this period.
The calculator uses the pre judgment interest formula:
Where:
Explanation: This formula calculates simple interest based on the principal amount, interest rate, and time period in days, converted to a yearly basis by dividing by 365.
Details: Accurate calculation of pre judgment interest is important in legal proceedings to ensure proper compensation for the time value of money and to comply with court requirements in NSW.
Tips: Enter the principal amount in dollars, the interest rate as a decimal (e.g., 0.05 for 5%), and the number of days. All values must be valid (principal > 0, rate > 0, days ≥ 1).
Q1: What is the legal basis for pre judgment interest in NSW?
A: Pre judgment interest in NSW is governed by the Civil Procedure Act 2005 and court rules, which allow courts to award interest on money judgments.
Q2: How is the interest rate determined?
A: The interest rate is typically set by court rules or regulations and may vary over time. Check the current prescribed rates for accurate calculations.
Q3: Are there any limitations on pre judgment interest?
A: Yes, courts have discretion in awarding pre judgment interest and may reduce or refuse it in certain circumstances, such as when there has been delay in prosecuting the claim.
Q4: Does this calculator account for compounding interest?
A: No, this calculator uses simple interest calculation as typically applied to pre judgment interest in NSW legal proceedings.
Q5: Is this calculation applicable to all types of cases?
A: While the formula is generally applicable, specific cases may have different rules or considerations. Always consult with a legal professional for case-specific advice.