What is the formula that allows

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If a farmer could earn $800 per year (net of all costs) from farming a particular piece of farmland, how much would farmers be willing to pay for that land if the interest rate is 4%? (what is the present value of the "stream" if income that could be earned from using the land?)

a. What is the formula that allows you to answer both part a. and part b. of this question? In what sense are they essentially the same relationship?

Reference no: EM132504731

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