I Got the answer to number 1, but am confused on how to got number 2.

will become fully operational in 2011. Total cost of the dam will be approximately $30 billion dollars. Assume you are estimating-budgeting the project in 1994. Assume this last increment of work is started and completed in 2011 and payment will be made upon completion of the work. Use 5% as your interest rate compounded yearly (effective annual interest rate). How much should you have on hand in 1994 to pay for the last $1 Billion dollars of work? 2, what is the effective annual interest when you have 9% compounded daily