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Geometric mean is often used in finance and economics for finding average rates of change, average rates of growth, or average ratios. Given n values
Geometric mean is often used in finance and economics for finding average rates of change, average rates of growth, or average ratios. Given n values (all positive), the geometric mean is the nth root of their product. The average growth factor for money compounded at annual interest rates of 17%, 37%, 14%, and 22% can be found by computing the geometric mean of 1.17, 1.37, 1.14, and 1.22. Find that average growth factor.
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