Choice C is the correct answer. Decay rate $r$ converts to decay factor $b = 1 - r$.

1. Identify Rate: The rate of decrease is $r = 4\% = 0.04$.
2. Calculate Factor: For decay, $b = 1 - r = 1 - 0.04 = 0.96$.
3. Form Equation: The initial value is 100, so $y = 100(0.96)^h$.

💡 Strategic Tip: "Decreasing by $r\%$" means you keep $(100-r)\%$ of the value.

Choice A is incorrect because 0.04 would mean losing 96% per hour. Choice B is incorrect because 1.04 represents growth, not decay. Choice D is incorrect because 4 represents a 300% increase.