Inflation Calculator

Capital Adjustments

To calculate the inflation adjustment on the Capital Amount invested, the Reference CPI on the CPI Calculation Date is divided by the Base Rate multiplied by the Capital Amount invested. The Reference CPI over the Base Rate is referred to as the Index Ratio. For example, you invest R10 000 on 1 April and the Base Rate is 101.2. On the Coupon / Interest Payment date on 31 May, the index is 102.6. To calculate the inflation adjusted balance of your R10 000, the following formula is applied:

Coupon / Interest Payments

The Coupon / Interest Rate payable on the Coupon / Interest Payment Dates is a fixed rate in respect of each of the 3 Maturities on offer over the term. The Coupon / Interest Rates applicable for each Maturity are derived from the Government Inflation Linked Bond Yield Curve as reflected on BESA, and are determined on the Coupon / Interest Payment Date and prevail until the maturity of the investment. Coupon / Interest Payments are calculated in accordance with the following formula:

where:
’c’ is the Coupon Rate; and
‘e’ is the inflation adjusted balance as at that date (Capital Balance). As explained above, the Capital Balance is determined on the Coupon / Interest Payment Dates by applying the Index Ratio to the Capital Amount.