In's and Out's of language

Caitlyn (pointing to the Out Door):  Look, that sign says "IN"!

Daddy:  No, look at it again, do you see the letter "N" in it?

Caitlyn:  No.

Daddy:  Well, then how can that word make an "ENNNN" sound with no letter "N" in it?

Caitlyn:  Magic!