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?

Answer 1

Hi there
The function is
Y (x)=10000 (1-0.02)^x
Y (x)=10000 (0.98)^x
Where x is the number of time

Hope it helps

Answer 2

Answer: 0.98

Explanation:

The exponential decay equation in x years is given by :-

`y=A(1-r)^x`, where A is the initial amount and r is the rate of decay( in decimal).

Given: The initial investment = $10,000

The rate of decay = 2% = 0.02

Substitute these values in the above equation, we get

`y=10,000(1-0.02)^x\\\Rightarrow\ 10,000(0.98)^x`

Here 0.98 is the multiplicative rate of change , the function will change by the constant ratio of 0.98 .