I presume this is meant to be exponential.
When f(x) = a(b)^x, a represents the starting value, b represents change, and x represents time.
The population began in 2000 (x = 0). This makes the equation equal to 78,500, which is your starting value and population in 2000.
1.02 means that the initial value is multiplied by 1.02 or 102% each year. Therefore, there is a 2% increase.