Personally I like to place my business address at the bottom of the page or the footer. To do this go to the floating bar and click on the button, 'Switch Between Header and Footer.' This will open a dotted box at the bottom of the document. You can type your office address here or anything you see fit for your letterhead. Again you can format the text by choosing the font, font size, color, align the text, etc.
Click on 'Insert,' again at the top of MS Word. When the menu appears, let your mouse arrow hover over 'Picture.' Here you'll have several options. You can create your letterhead on the fly using some of those options. However, for our purposes we'll opt to choose 'From File,' since we already have a ready graphic. Click on the option, 'From File,' and a dialogue box opens. Locate your graphic and then click on it and then click the 'Insert' button. Your graphic will then appear inside the dotted box.