How Do You Calculate The Geometric Mean?
Everyone knows about the arithmetic mean–the “average” of a set of numbers–and how to find it by adding the numbers up and dividing the sum (addition) by the number of numbers in the set. The lesser-known geometric mean is the average of the product (multiplication) of a set of numbers. Here is how to calculate it. Determine if you need the geometric mean. While the arithmetic mean calculates the average of a sum of numbers and cannot be used for ratios or percentages, the geometric mean can be used for quantities that have been multiplied by some factor and you need to find the “average” factor. The most common use of the geometric mean is to find the average rate of financial return. Know the formula for calculating the geometric mean. Simply stated, the geometric mean is the n-th root of the product of n numbers (data points). An example is shown in Steps 3 and 4. Multiply all of the data points and take the n-th root of the product. For example, to find the geometric mean of a se
