Biti Bank purchase a $3,000 bond that pays12% pacompounded half-yearly and is redeemable in exactly 12 years. The price paid will yield the bank6% pacompounded half-yearly if held to maturity. Biti Bank hold this bond for 3 years before coming to a decision that the bond should be sold. They decide to sell to ZNZ Bank at5.5% pacompounded half-yearly.

a)Calculate the price (P_B) that Biti Bank paid to purchase the bond. Give your answer in dollars and cents to the nearest cent.

P_B= $

b)Calculate the price (P_Z) that ZNZ Bank paid to purchase the bond. Give your answer in dollars and cents to the nearest cent.

P_Z= $

c)Calculate the nominal annual yield compounded half-yearly that Biti Bank realised. You may give your answer as a percentage per annum to the nearest percent or use linear interpolation or a financial calculator to give a more accurate result.

Yield =% pa