Interest rates are compensation for the time-value of money, and are calculated on judgments (the amount of money one party to a lawsuit is ordered to pay another party) based on the applicable state or federal statutes. There are often different interest rates set by law for prejudgment interest (the interest on the amount owed before the judgment) and post-judgment interest (the interest on the amount owed after the judgment). The calculation of prejudgment and post-judgment interest rates vary from state to state (and in federal court), and require a careful analysis of the statutes.

In Kentucky, interest rates on judgments are governed by state law, which sets forth the rates for both prejudgment and post-judgment interest. As of the knowledge cutoff in 2023, Kentucky Revised Statutes (KRS) 360.040 stipulates that the prejudgment interest rate is generally subject to the contract rate if one exists, or otherwise it is subject to a statutory rate which may be adjusted periodically. Post-judgment interest is calculated from the date of the judgment until the judgment is paid, and the rate is also specified by statute, which may be adjusted over time. The rates are not necessarily the same for prejudgment and post-judgment interest. Attorneys in Kentucky must refer to the current statutes to determine the applicable rates at the time of the judgment, as these rates can change with legislative updates. It is important for parties involved in litigation to understand these rates as they can significantly affect the total amount owed under a judgment.