Prorate Meaning: Definition, Examples, and Translations
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prorate
[หproสreษชt ]
Definition
financial calculation
To prorate means to allocate or distribute an amount of something proportionally, based on a certain criterion. It is commonly used in finance and accounting to apportion costs, expenses, or income over a specified period of time or to a specific number of people. For instance, if a service is used sporadically, the total costs may be prorated based on usage. This helps in achieving a fair pricing model where each party pays only for what they consume.
Synonyms
Examples of usage
- We need to prorate the rent for the partial month.
- The company decided to prorate the commission for the first quarter.
- Employees will have their salaries prorated if they join mid-month.
Translations
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Interesting Facts
Finance
- In financial contexts, prorating is often used to adjust bills or expenses to reflect usage, such as in utilities or rent.
- Insurance companies frequently prorate premiums when a policyholder cancels their coverage partway through a term.
- Prorated salaries are common in cases of employment termination, reflecting the actual days worked.
Education
- Schools may prorate tuition fees when students enroll mid-term, ensuring they only pay for the classes they attend.
- Scholarships can also be prorated based on the number of credits a student takes each semester.
- Instructors often prorate grades for students who complete assignments late due to valid reasons.
Pop Culture
- Prorating appears in TV shows and movies when characters discuss fair splits of funds, like in a partnership or deal.
- In popular finance books, prorating expenses is essential for making smart budgeting decisions.
- Reality TV often features scenarios where participants must prorate winnings or goods based on their contributions.
Mathematics
- Prorating is a practical application of ratios and fractions, helping to teach fundamental math skills.
- The concept illustrates the relationship between parts and wholes, making it relatable for students learning basic arithmetic.
- Using prorating allows for clearer understanding of proportional thinking, applicable in various math problems.
Origin of 'prorate'
Main points about word origin
- The word 'prorate' comes from the Latin phrase 'pro rata', meaning 'in proportion'.
- It first appeared in English writings in the 19th century, reflecting its mathematical roots.
- The term highlights a method of dividing something fairly based on specific criteria.
The term 'prorate' is derived from the Latin word 'prorata,' which translates to 'on the basis of the proportion.' It first entered the English language in the early 19th century, contextualized primarily in the realm of finance and taxation. The concept evolved as commerce and trade became more complex, requiring fair distribution methods for costs, taxes, and profits. Over the years, prorating has found applications across various sectors, including real estate, payroll, and telecommunications, reflecting a growing need for just financial practices. Its use has expanded to encompass various contexts where proportional allocation is needed.