Potential energy = m · g · h
-- When you held the ball at 2.0 meters above the floor, it had
(0.5 kg) · (9.8 m/s²) · (2.0 m) = 9.8 Joules of potential energy.
-- After it bounced and went back up as high as it could, it was only 1.8 meters above the floor. Its potential energy was
(0.5 kg) · (9.8 m/s²) · (1.8 m) = 8.82 Joules
-- Between the drop and the top of the bounce, it lost
(9.8 - 8.82) = 0.98 Joule .
-- The energy was lost when the ball hit the floor. During the hit, 0.98 joule of kinetic energy turned to thermal energy, which slightly heated the ball and the floor.