When you prorate an amount, you distribute the payment proportionally over a set period. Rent, utilities and other kinds of payments can be prorated. The term prorated is associated with the exchange of money. The phrase was first recorded in the 1860s and most likely came from the Latin phrase pro rata, or "according to the calculated."
Real estate transactions are often prorated. If you sign a lease halfway through the month you owe only the portion of the rent for the time that you actually inhabit the apartment.
Video of the Day
If your June rent is $600 a month, and you move in on the 15th day of the month, you only owe rent from the June 15 to June 30.
Do The Math
Divide $600 by the number of days in the month, which is 30. Your answer is 20, which means you pay $20 a day to live in your apartment. You owe a prorated amount of rent for the month of June that is equal to $20 times the number of days you will live there. That total is $300, or the prorated rent amount.
Auto loans, credit cards and taxes during real estate closings are also prorated. Amounts can be based on daily rates, monthly rates or even yearly rates.