P= 12e^(-0.02t)

Question

What is the growth rate?

I thought it would be -1.98% because I punched in the e^-0.02 part and got .98 something and then that minus 1 is r so I got -1.98.

Answer 1

for exponential growth (continuous compounding)

amount = original * e^rt
rate = -.02 or -2 percent

for example if you have ten dollars
then after one year you will have
10 e^-.02
= 10(.980298) = nine dollars and eighty cents
so each year multiply by .98
NOT 1.98
BUT that is an approximation
It is really .980298 etc
but growth rate is negative 2%

Answer 2

Thank you!