Given the information below for Bond A and Bond B , do the following questions and display formulas used.

(1) Calculate coupon amount and bond price for Bond A and Bond B.

(2) Calculate the Macaulay duration for Bond A using "step-by-step" method and the Macaulay duration for Bond B using the Excel built-in function.

(3) Calculate the Convexity for Bond A and the percentage change in bond price for Bond A by using Duration and Convexity if interest rate decreases by 2.5%.

(4) Which bond has greater interest rate risk and why? Answer this part in the given text box

Bond A: 10 year bond, annual coupon rate 5%.

Bond B: 20 year bond, annual coupon rate 7%.

The current interest rate in the market is 6 %.

Both bonds have a face value of $1000.

PLEASE ANSWER USING EXCEL AND SHOW FORMULA TEXT