Hal is asked to write an exponential function to represent the value of a 10,000 dollars investment decreasing at 2 percent annually. What multiplicative rate of change should Hal use in his function?

A 2% annual decrease means the investment retains 100% − 2% = 98% of its value each year. Converting 98% to a decimal gives 0.98, so Hal should use a multiplicative rate of change of 0.98. Choice A is 0.98.

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