Suppose Microsoft were to issue a $1,000 face value bond with 10 years to maturity. This bond as an annual coupon of $40. Bonds with similar risk have a yield to maturity of 4%. What is the value of this bond today? Solve in excel and please include the formulas used.

Now suppose instead that the market interest rate 5% and newly issued bonds are now paying coupon rates of 5%. How much is the Microsoft bond issued worth now if it still pays a $40 coupon and has 10 years to maturity?