This paper presents an efficient algorithm Exponential Finite Difference Method (EFDM) for simulation of electromagnetic response of layered earth by considering the exponential basis function. EFDM demands a parameter μ to be chosen judiciously to obtain optimum results. Using eigenvalue analysis of coefficient matrix an estimator of optimum μ is defined. Since the electromagnetic response has oscillatory behavior, EFDM handles it better and gives more accurate results in comparison to the Classical Finite Difference Method (CFDM). Using EFDM we can choose coarser grids to obtain same accuracy of result as CFDM provides with a given grid. As a result EFDM reduces the time and cost of computation in comparison to CFDM.


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