Refer to figure.
The aircraft must fly at 14 500 ft (12 500 + 2000). This altitude must be the true altitude of the aircraft. This altitude must be corrected for any temperature ISA deviation and then any difference in pressure from standard (1013 hPa), to get the pressure altitude, allowing us to work out the lowest usable flight level.

The first step is to determine the temperature correction. The ISA deviation is ISA -25°C. Based on the 4% rule and its calculation mentioned in the rules below, the height correction for the temperature can be calculated as follows: Height correction for temperature = 4 × (-25) × (14 500/1000) = -1450 ft.

In this case, the temperature correction is added to the true altitude as per the rules below (refer to the table below), to give an indicated altitude of ­­15 950 ft.

Next, we need to compute the pressure correction by considering the deviation from the standard mean sea level pressure of 1013 hPa: 1013 hPa - 980 hPa = 33 hPa. Since the barometric lapse rate near the surface is 30 ft/hPa, the pressure correction can be calculated as follows: Pressure correction = 33 hPa x 30 ft/hPa = 990 ft. This value needs to be added to the indicated altitude as per the rules below:

Pressure Altitude = 15 950 ft + 990 ft = 16 940 ft.

The lowest suitable flight level in order to achieve an obstacle clearance of 2000 ft is FL170.

RULES. The following rules should be considered for altimetry calculations:

• All calculations are based on rounded pressure values to the nearest lower hPa.
• The value for the barometric lapse rate between MSL and 500 hPa to be used is 30 ft/hPa as an acceptable approximation of the barometric lapse rate.
• To determine the true altitude/height, the following rule of thumb, called the ‘4 %-rule’, shall be used: the altitude/height changes by 4% for each 10°C temperature deviation from ISA.
  For simplification: Height correction for the temp = 4 × (ISA DEV) × Indicated alt/1000 = _____ ft
• If no further information is given, the deviation of the outside-air temperature from ISA is considered to be the same throughout the whole layer.
• The elevation of the aerodrome has to be taken into account. The temperature correction has to be considered for the layer between the station (usually an aerodrome) and the position of the aircraft.

DEFINITIONS.
Pressure Altitude: The altimeter indication with standard pressure (1013.2 hPa) set.
Indicated Altitude: The altimeter indication with local QNH set.
True altitude: The actual altitude of the aircraft above mean sea level.