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: