The number of people participating in a challenge is an example of exponential growth and might be modeled by a function such as = 2(2.5)x . What does the 2.5 in this function represent?

The number 2.5 in this function represents the average number of people each person challenged. Then the correct option is D.
Let a be the initial value and x be the power of the exponent function and b be the increasing factor. The exponent is given as
y = a(b)ˣ
The number of people participating in a challenge is an example of exponential growth and might be modeled by a function such as
y = 2 × (2.5)ˣ
The number 2.5 in this function represents the average number of people each person challenged.
Then the correct option is D.
More about the exponent link is given below.
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