Home>Introduction>RPI

Retail Price Index (RPI)

If you wish to calculate budget amounts for 2 or 3 years then you can use RPI to increase/decrease the individual amounts each year.

On the Values window there is an overall RPI. This is applied to every line when calculating years 2 and 3. On each line there is an additional RPI which is added to the overall RPI just for that category. For example:

Car fuel costs have risen over RPI. The overall RPI might be 2% but fuel is 3% so:

• Overall RPI = 2%
• Car Fuel RPI = 1%
• Year 1 budget = £1000

Year 2 budget = year 1 budget *(100+overall RPI+Line RPI)/100

Year 2 Budget = 1000 (100+2+1)/100 = £1030

Year 3 Budget = year 2 budget * RPI = 1030 * 1.03 = £1061

The line RPI can be negative. For example a fixed price mortgage.

• Overall RPI = 2%
• Mortgage RPI = -2%
• Year 1 budget = £6000

Year 2 budget = 6000 *(100+2-2)/100 = £6000

When the individual budget items are generated the RPI is used in the same way.

Prev-Next