Question

hal is asked to write an exponential function to represent the value of a $10, 000 investment increasing at 2% annually. what multiplicative rate of change should he use in his function?
1.08
1.02
1.09
0.02

Explanation:

Step1: Understand exponential growth formula

The general exponential growth function is $A(t) = P(1 + r)^t$, where $r$ is the annual growth rate, and $(1 + r)$ is the multiplicative rate of change.

Step2: Convert percentage to decimal

The annual growth rate is 2%, so $r = \frac{2}{100} = 0.02$.

Step3: Calculate multiplicative rate

Add 1 to the decimal growth rate: $1 + 0.02 = 1.02$.

Answer:

1.02