Posted by Sray on .
The value of an index-linked pension is updated each September using the RPI. In September 2007 the pension paid £265. Calculate the value of the pension in September 2008. The value of the RPI was 208.0 in September 2007 and 218.4 in September 2008
Math (inflation indexing) -
(218.4/208.0)* £265 = £278.25
In the USA, the RPI (Retail Price index) is called the COLA (Cost of Living Adjustment).