Adjusting for inflation in the numerator in return requirement calc

When is it appropriate to adjust the living expenses by inflation (multiply 1+INFL) in the numerator of the return requirement calculation? I did it on a couple of the EOC questions where they stated that expenses are rising with inflation. However, the answer key doesn’t show that.

Note, I’m not talking about the additive inflation that you apply to the nominal base return requirement.

depends on the year. (by this I mean - time when the expense is due - is it the current year or is it in the next year).

can you point out which EOCs you did that…

Sure, for example I did it on question 12 C in EOC Reading 10.

I had 4.635% instead of 4.5%

the reason is you are doing it for the first year - and all numbers are provided for that year. so u do not need to inflate them for this year.

time line as I said above.