It is exponential decay, and the whole thing turns on the base, which is the 0.89.
When an equation has the form y = ax, raising the exponent by 1 means multiplying by a one more time. So the only question that matters is whether multiplying by a makes things bigger or smaller. If a is greater than 1, you are multiplying by something larger than one at every step, so the value climbs and you have growth. If a sits between 0 and 1, you are multiplying by a fraction at every step, so the value shrinks and you have decay.
Here a = 0.89, which is between 0 and 1, so the equation is decay.
I prefer reading the base over memorizing the rule, because the base also tells you how fast and not just which direction. Multiplying by 0.89 is the same as keeping 89 percent of what you had and losing the other 11 percent, so y = 0.89x falls by 11 percent every time x goes up by 1. It behaves like a car that loses 11 percent of its value each year: it never quite reaches zero, it just keeps shrinking toward it.
You can watch that happen:
0.891 = 0.89
0.892 = 0.7921
0.8910 ≈ 0.3118
Each one is smaller than the one before it, and after ten steps only about 31 percent of the starting amount is left. If you want one more check on the feel of it, this equation takes a little under 6 steps to fall to half of where it started.
There is one trap worth knowing about, because it catches a lot of students. People often go looking for a negative sign or a negative exponent to decide that something is decay, and that is not where it lives. There is nothing negative anywhere in 0.89x and it decays anyway. Meanwhile 2−x looks negative and it also decays, but not because of the minus sign: 2−x is the same thing as (½)x, and ½ is a fraction between 0 and 1. So the reliable move is to rewrite the equation until the base stands alone and positive, and then just read the base.
So, our final answer is that y = 0.89x represents exponential decay, shrinking by 11 percent for each increase of 1 in x.
