Answered step by step

Verified Expert Solution

## Question

1 Approved Answer

# Suppose I have computed the cost of carbon per mile for my car at 0 . 0 1 2 per mile. Assume that the interest

Suppose I have computed the cost of carbon per mile for my car at $0\mathrm{.}012$ per mile. Assume that the interest rate is $4\%$ and that I drive the car $28,000$ miles per year. What is the present value of the carbon expense for five 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 five values back to the present.

## Step by Step Solution

There are 3 Steps involved in it

### Step: 1

### Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

### Step: 2

### Step: 3

## Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started