1. Suppose there is a 2-year bond that pays an interest payment of $70 at the end of the first year and then pays another interest payment of $70 plus the $1,000 face value at the end of year two when it matures. The interest payment is known as a coupon payment, and therefore, bonds that pay interest are known as coupon bonds. Since this bond pays its interest payments once per year, it is known as a 7% annual coupon bond. Notice that 7% of the $1,000 face value of the bond is equal to the $70 coupon payment.
   1. The yield to maturity of a bond is the interest rate that equates the present discounted value of a bonds cash flows to its price. If this bond is selling for $950, find the yield to maturity of this bond algebraically. Answer to a: YTM = 9.88%
   2. Set up the cash flows for this bond in Excel. Then use Solver to check your answer to part b making sure to keep the Solver solution before you save and submit the Excel file. Please submit your Excel spreadsheet that has your Solver solution in a worksheet labeled Q3. Excel Note: Recall that Solver is an Add-In that may not be loaded into Excel on your computer.

Please answer only question b and please show the formulas used in Excel.