What rate applies to interest on general damages?

• A. 0%
• B. 8%
• C. 2%
• D. 4.5%

Answer: (C)

General damages are non-financial losses like pain and suffering, and when they are awarded, the interest on that sum uses a fixed rate. The rate for interest on general damages is 2% per year, simple interest. This modest, set rate provides compensation for the delay in payment of non-pecuniary losses without tying it to market fluctuations. It applies to the amount of general damages from the time it becomes payable until payment. The other rates listed don’t fit this specific rule for general damages.