Question: 1. The amount of $7,000 is invested in a Certificate of Deposit (CD) and will be worth $16,000 in nine years. What is the continuously compounded nominal (annual) interest rate for this CD?
2. A mutual fund investment is expected to earn 11% per year for the next 25 years. If inflation will average 3% per year during this 25-year period of time, what is the compounded value (in today's dollars) of this savings vehicle when $10,000 is invested now?