real income index = (nominal income index ÷ inflation index) × 100
In 2016, nominal income increases by 1.9%. The same year, inflation is 0.3%.
The nominal income index number is 101.9. The inflation index number 100.3.
The purchasing power index number is: (101.9 ÷ 100.3) × 100 = 101.6 Thus, real income has increased by 1.6%.