Hi Mark, welcome to the Luger Forum!! I can help you in the identification, but not in the evaluation. The value depends on the condition and the number matching on all the numbered parts, both externally and internally. You or someone familar with Lugers could field strip it and locate the appropriate numbered parts. If you would submit some detailed photos, we could give you a dollar range.
Your Luger was made in 1939 by Mauser. The "42" on the toggle top is the Ordnance Code for Mauser in that year. Every so often the Ordnance Code changed. The eagle-over-655 marks are inspection or Waffenamt Marks and the eagle-over-swastika is the firing proof mark.
The serial number of your Luger is 8700y. Note, the y suffix is important and is part of the serial number. Mausers were made in blocks of 10,000 pistols beginning with pistols with no suffix. Then the next 10,000 had a suffix of "a", the next were identified with the suffix "b" and so on. The Germans didn't begin every year with the no suffix series, but just continued the numbering from year to year. Luger 8700y was completed about December 1939.
The wood bottom magazine was NOT supplied with your pistol. The magazine should be a blue folded metal tube magazine with an aluminum bottom. The bottom would be stamped with the serial number "8700 over the y suffix. It was shipped with two magazines; the spare was identified with a "+" sign under the "y" suffix mark. Below the "y" or "+" mark, the magazine inspection mark, eagle-over-655, is found.
I hope this answers your identification questions. Good Luck on the value question!!
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