Pro Rata Rule Calculator
This calculator helps you understand the Pro Rata Rule, a principle often used in insurance and finance to fairly distribute costs or benefits when an agreement starts or ends mid-term.
The Pro Rata Rule, which translates to "in proportion," ensures that neither party is unfairly disadvantaged when a contract or policy is not active for its full intended duration. For instance, if an insurance policy with an annual premium is cancelled after six months, the Pro Rata Rule dictates that the policyholder should receive a refund for the remaining six months of coverage. Conversely, if a new policy begins mid-year, the initial premium might be prorated for the remaining term.
This calculator will help you determine the prorated amount based on the total period and the duration of the actual coverage or agreement.
function calculateProRata() {
var totalAmount = parseFloat(document.getElementById("totalAmount").value);
var totalPeriod = parseFloat(document.getElementById("totalPeriod").value);
var actualPeriod = parseFloat(document.getElementById("actualPeriod").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
if (isNaN(totalAmount) || isNaN(totalPeriod) || isNaN(actualPeriod)) {
resultDiv.innerHTML = "Please enter valid numbers for all fields.";
return;
}
if (totalPeriod <= 0) {
resultDiv.innerHTML = "Total period must be greater than zero.";
return;
}
if (actualPeriod totalPeriod) {
resultDiv.innerHTML = "Actual period cannot be greater than the total period.";
return;
}
var proratedAmount = (totalAmount / totalPeriod) * actualPeriod;
// Check if the result is a valid number before displaying
if (!isNaN(proratedAmount)) {
resultDiv.innerHTML = "