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Peter buys a bond with a face value of $100, a time to maturity of three years, a coupon of 3% pa with semi-annual payments

Peter buys a bond with a face value of $100, a time to maturity of three years, a coupon of 3% pa with semi-annual payments and a yield of 2% pa. Eighteen months later (just before the coupon is paid), the Reserve Bank of Australia unexpectedly increases the cash rate. The yield on Peter's bond increases to 2.5% pa. Peter sells the bond. Calculate the buying and selling price of the bond.

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