Question 1140502
I think the formula should be C(t)=C(1=r)^t
if that is the case, C(2)(=C(1.035)^2=1.071225, and the boat would be $122,800*1.071225=$131,546.43

If linear, then it would be 1.07*122800=$131,396.  Inflation inflates itself, so the first result should be the correct one.