Suppose I have computed the cost of carbon per mile for my car at 0.01 per mile. Assume that the interest rate is 3% and that I drive the car 20,000 miles per year. What is present value of the carbon expense for four years? You will need to use the PV function in Excel or a financial calculator. In Excel the present value of a stream of monetary cash flows is given by PV(rate,number of payments,payment amount) where rate is the interest rate. We enter the payment in Excel as a positive number. You can also compute the carbon costs at the end of each year and then discount those four values back to the present