I'm missing some crucial information: is the aircraft going in circles or in a straight line?
No you're not. The aircraft will travel 4.08 nms whether it's flown in circles or not. The question did not ask how much closer to a particular point the aircraft would be after 2.5 mins at a G/S of 98 kts. Since the question mentioned groundspeed specifically then it matters not in which direction(s) the aircraft was flown.