It's best for me to use an example than try to explain it.
Low RG = 2.50
Differential = 0.040
6.75/4 = 1.6875 = 1 11/16 (I believe you just move the decimal in the differential two places to the right)
For every 1 11/16" the pin is away from your PAP, add 0.01 to the low RG. So if you do a 5" pin to PAP, the drilled RG will be about 2.53(5/1.6875 = ~2.96).