Question

hal is asked to write an exponential function to represent the value of a $10,000 investment decreasing at 2% annually. what multiplicative rate of change should hal use in his function? 1.98 0.02 0.98 1.02

Explanation:

Step1: Recall exponential decay formula

The general form of an exponential decay function is \( A(t)=A_0(1 - r)^t \), where \( A_0 \) is the initial amount, \( r \) is the rate of decrease (in decimal), and \( (1 - r) \) is the multiplicative rate of change.

Step2: Calculate the multiplicative rate

Given the annual decrease rate \( r = 2\%=0.02 \). Then the multiplicative rate of change is \( 1 - r=1 - 0.02 = 0.98 \).

Answer:

\( 0.98 \)