Do you believe there is an error in the solution? I don't understand why the discount rate is not the same. They use 2.35% as the base and then 2.5% - 25bps to calculate the PV'.
Any references to 1.025 are incorrect (they should say, 1.0235), however if you work out the math they actually used 1.0235 (not 1.025 shown) so the answer in still correct.
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Any references to 1.025 are incorrect (they should say, 1.0235), however if you work out the math they actually used 1.0235 (not 1.025 shown) so the answer in still correct.