Fred and Max Each Want to Have $10,000 Saved fiVe

question 145

Multiple Choice

Fred and Max each want to have $10,000 saved five years from now. Fred can earn 4.35%, compounded annually, on his savings and Max can earn 4.50%, compounded annually, on his
Savings. Both Fred and Max are going to deposit one lump sum today and will not add any
Additional funds to their accounts. Given this, Max _____ deposit _____ Fred to achieve the goal.

• A) Must; more than
• B) Must; at least as much as
• C) Must; as much or more than
• D) Can; less than
• E) Can; the same amount as

---

Definitions:

Formal Authority

The power or right to give orders, make decisions, and enforce obedience, typically within an organizational hierarchy.

Influence

The capacity to have an effect on the character, development, or behavior of someone or something.

Coercive Power

The ability of a person to compel or force someone else to act in a certain way through threats, punishment, or control measures.

Withhold Positive Outcomes

The act of not presenting or delaying favorable results or benefits.