Question

Jennifer was awarded damages of $150,000 in a successful lawsuit she brought against her employer 4 years ago. Simple interest on the judgment accrues at the rate of 15%/year from the date of filing. If the case were settled today, how much would Jennifer receive in the final judgment?

Answer 1

The final amount Jennifer would receive is $240,000, which includes the original judgment of $150,000 plus $90,000 in simple interest that accrued over 4 years at a 15% annual rate.

Step-by-step explanation:

To calculate the final amount Jennifer would receive from the lawsuit settlement, we need to compute the simple interest that accrued over 4 years and add it to the original judgment amount of $150,000. The simple interest I can be found using the formula: I = P × r × t, where P is the principal amount ($150,000), r is the annual interest rate (15%, or 0.15 as a decimal), and t is the amount of time the interest has been accruing (4 years).

The calculation for the interest is as follows:

I = $150,000 × 0.15 × 4 = $90,000

Therefore, the total amount of simple interest accrued is $90,000. To find out the final judgment amount, we add the interest to the original amount:

Total payment = Original amount + Interest
Total payment = $150,000 + $90,000 = $240,000

So, if the case were settled today, Jennifer would receive $240,000.

Answer 2

The annual interest is $150,000 x 0.15 = $22,500. The accrued interest after 4 years is $90,000. Therefore in the final judgement Jennifer would be awarded:
150,000 + 90,000=240,000.
The answer is $240,000.