Present Value at time 0 Land is an indestructible capital asset that offers a perpetual revenue flow. You own a piece of land that returns $20,000 per year forever. The relevant real interest rate to consider is 4%. What is the present value of this land at time 0?I need to use integration here
If you can get 4% annual returns elsewhere (relevant interest rate), then the asset returning 20,000 per year is worth 20,000 / 0.04 or 500,000.

In other words, 20,000 is 4% of the asset's present value and 500,000 is 100% if its present value.