First, we write an exponential function to model the given situation, thus, recall its general form. y=abx In this formula, a is the initial value and b=1+r, where r is the rate of change. If the function represents growth then r>0. Conversely, if it represents decay, then r<0.
To write the equation, we first need to define the variables. Let y be the population, and x the number of years after that have passed. In this case, the initial value is a population of 120000. Since the population increases 1.2% each year, we have that r=0.012. y=120000[1+0.012]x⇕y=120000(1.012)x