Susan purchased a 5-year Treasury bond with a coupon rate of j2 = 5% p.a. and a face value of $100 that matures at par. The purchase price was $95.750.

a. [2 marks] Use the approximate bond yield formula to estimate the yield rate.Give your answer in j2 form, rounded to 3 decimal places.

b. [6 marks] Use linear interpolation to calculate the yield rate. Give your answer in j2 form, rounded to 3 decimal places. Hint: 2.8% per half year and 3.1% per half year are the lower bound and the upper bound for the linear interpolation.