Learned friends, I have an inquiry. Where a court gave judgment on a monetary sum with interests payable from a certain date e.g. Judge: I hereby award the sum of N35,000,000 as special damages in favour of the Claimant against the Defendant. Interest at the rate of 21% per annum is awarded on the above sum of N35,000,000 from 10th January, 2005 until the day of this judgment and at the rate of 10% per annum thereafter until final liquidation. To my knowledge, calculating interest on any sum of money whether saving deposits, credit facilities or invested funds is always either by way of a simple or compound interest. simple interest, as the name implies, is by multiplying the principal sum by the rate of interest and the period (whether year or months or days). Remember our elementary formula for calculating simple interests I= PxRxT/100 where P is the principal sum, R is for the rate and T stands for the time/period. On the other hand, compound interest is where for every period, the amount due as interest is added to the principal and use as the new principal for calculating the new rate i.e. interest is compounded. I cannot remember the formula now. Question: How do we calculate the interest awarded on judgment sum? Is it to be calculated as simple interest or compound interest? Can the mode of calculating interest be implied in the absence of express indication by the judge? Are there any case law or statutory position on this issue of simple or compound interests dichotomy? Ill be glad to have your feedback. Best of professional regards!
Posted on: Wed, 29 Jan 2014 17:58:49 +0000
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