The CPC Calculator is used to calculate the CPC (cost-per-click) based on CPM (cost per 1,000 impressions) and CTR (click-through rate).
Nowadays, the common model is often not as straightforward as the one you see here. Advertisers often compete over the ad placement in a real-time bidding auction. Special algorithms take multiple factors (the CPC bid of each ad, its performance so far, what they know about the user) into account and try to predict actual revenue for every impression.
CPC is cost per click, so the formula for it is super simple: CPC = total cost / number of clicks.