1. Gordon has heard that fusion powered SUV's will be available in 10 years at a price of 125000 dollars. How much should he invest now, at 9.6 percent interest compounded annually, to have the amount required to purchase the SUV in 10 years.
2. A hedge fund charges an incentive fee of 10% of any investment returns above the T-bill rate, which currently is 3.5%. In the first year, the fund suffers a loss of 9.5%. What rate of return must it earn in the second year to be eligible for an incentive fee? (Do not round intermediate calculations. Round your answer to 2 decimal places.)