Nominal Return error?: Schweser BK1: 2AM Q1

Yep I’m in the slow lane with the mocks/practice papers. Could use some input here with Q1 Exam 2 AM Salary not indexed so no increase Costs increase with inflation (therefore 2% higher than last year) 116k/3.75m = 3.1% Totally get all of that. When Schweser add another 3% to that return requirement. Now I’m lost. Can’t see this as an errata. What’s going on? Am I missing something fundamental? Thanks, APP

I think I am. Purchasing power of the portfolio. Sorry guys. (3.75m * 1.02 +116k)/3.75 m is 5.1% so it checks out