Try running Task Manger, select Performance, then select Resource Monitor. When in Resource Monitor select Memory and you should see the breakdown of the 3.5 gb memory installed in your system.
It is perfectly reasonable - and normal - to see only 2.75GB of your 3.5GB total memory be available to Windows. In a system with 4GB total, the amount normally available to Windows is 3.25GB. A portion of the available memory is utilized to support system operation - BIOS, Internal Video, etc. and etc...