Geometric Mean
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Arithmetic mean
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Formula: Geometric mean = (x1 x x2 x ... x xn)^(1/n). All values must be positive.
Compute the geometric mean of positive numbers: ideal for growth rates, ratios, and returns.
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Enter numbers to see the result.
The geometric mean multiplies all values and takes the nth root. For growth factors like 1.05 (up 5%) and 0.97 (down 3%), it gives the constant rate that would produce the same final result: about 1.058 for the default data, or 5.8% average growth.
Use the geometric mean for ratios, rates, and investment returns, where values compound. The ordinary arithmetic mean overstates average growth because it ignores compounding; the geometric mean never exceeds it.