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

P(1) = P(0) [exp (rt)]
9,800 = 10,000 (0.98)^1

r = loge (0.98)  = ln (0.98) = -0.0202

P(t) = P(0)[exp(-0.0202t)]

Answer 2

His function should look like
$M=10000*(1.00-0.02)^{y}$
or