Suppose a 25-year, $100,000 par value bond with an annual fixed 3.5% coupon rate (coupons paid semiannually, as are most bonds) is trading for a price of $108,749.92.

a. What is the bonds yield to maturity or YTM (expressed as an APR with semiannual compounding)?

b. If this bonds yield to maturity or YTM changes to 2.5% APR, what will the bonds new price? What is this bonds new price if the YTM changes to 3.5%?