This question is from a/s/m FM2 exam 11th edition, question 3 pg 55.

Tawny makes a deposit into a bank account which credits interest at a nominal interest rate of 10% per annum, convertible semiannually

At the same time, Fabio deposits 1000 into a different bank account, which is credited with simple interest

At the end of 5 yrs., the forces of interest on the two accounts are equal, and Fabio's account has accumulated to Z. Find Z

The firs line in the sollutions reads...

Tawny's effective rate of i = 1.05^2 -1 = .1025

Why are they subtracting 1 from a(t)? Thank you in advance..