Percentage increase of something is often represented in a formula of a format like this:
X=Ar^t
Where X represents the total amount after t years.
A or 87000 in this case represents the starting value, which is this case is the starting population of the town. r or 1.12 represents the percentage increase, if it increases by 12% than the next year has 1.12 times as many people as the previous year so this is represented by 1.12 rather than say 0.12 which would indicate a 88% decrease instead. t is the time, no. of years in this case, that has elapsed since 1996.
This formula basically means that a town population of 87000 increases by 12% for every year of time that elapses.
