Using the yield curves data below, estimate the value of an annuity that pays $1000 every five years over the next 25 years (e.g., five total payments) paid by either the U.S. Department of the Treasury and Microsoft. Please complete calculations with work shown or within an excel sheet.

Calculate the implied yield to maturity for each security. While the yields you have plotted are for coupon bonds, because coupon rates are relatively low, you decide to treat them as zero-coupon yields for this estimation, as you feel the estimation error from such an approximation is small relative to the other noise in the data.

U.S. Department of treasury

TimeYeilds

1 Mo- 0.09

2 Mo- 0.1

3Mo0.1

6 Mo0.12

1 Yr0.13

2 Yr0.14

3 Yr0.18

5 Yr0.29

7 Yr0.51

10 Yr0.71

20 Yr1.21

30 Yr1.45

Microsoft -

1 Yr-0.216

2 Yr-0.22

3 Yr-0.282

5 Yr-0.703

7 Yr-0.868

10 Yr-1.638

20 Yr-2.167

30 Yr-2.555

Thank you in advance