Pro Rata Calculator
What is Pro Rata?
The term "pro rata" is a Latin phrase meaning "in proportion." In finance and mathematics, it refers to a method of allocating or distributing something proportionally. This is commonly used when an amount needs to be divided among different parties based on their respective shares, or when a payment or charge needs to be adjusted based on a specific period.
How the Pro Rata Calculator Works
This Pro Rata Calculator helps you determine a proportional amount based on a given total amount and a defined ratio. You provide:
- Total Amount: The entire sum or quantity you are working with.
- Part to Calculate: The specific portion or segment of the total for which you want to find the proportional value.
- Total Parts: The sum of all the individual parts that make up the whole.
The calculator then computes the value of the 'Part to Calculate' proportionally to the 'Total Parts' out of the 'Total Amount'.
Formula Used:
The calculation is based on the following formula:
Pro Rata Amount = (Part to Calculate / Total Parts) * Total Amount
Example Calculation:
Imagine a company has a total profit of $1000 to distribute among three partners. Partner A is entitled to 50 parts, Partner B to 30 parts, and Partner C to 20 parts. The total parts are 50 + 30 + 20 = 100.
If you want to know Partner A's share (the 'Part to Calculate'), you would input:
- Total Amount: 1000
- Part to Calculate: 50
- Total Parts: 100
The calculator would output:
(50 / 100) * 1000 = 0.5 * 1000 = 500
So, Partner A would receive $500.