Enter the pro-rate cancellation factor and the short rate into the Calculator. The calculator will evaluate the Short Rate Penalty. 

Short Rate Penalty Formula

SRP = PRCF * SRF

Variables:

  • SRP is the Short Rate Penalty ()
  • PRCF is the pro-rate cancellation factor
  • SRF is the short rate

To calculate the Short Rate Penalty, multiply the pro-rate cancellation factor by the short rate.

How to Calculate Short Rate Penalty?

The following steps outline how to calculate the Short Rate Penalty.

  1. First, determine the pro-rate cancellation factor. 
  2. Next, determine the short rate. 
  3. Next, gather the formula from above = SRP = PRCF * SRF.
  4. Finally, calculate the Short Rate Penalty.
  5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

pro-rate cancellation factor = 800

short rate = 900