Question

The geometric mean is often used in business and economics for finding average rates of​ change, average rates of​ growth, or average ratios. Given n values​ (all of which are​ positive), the geometric mean is the nth root of their product. The average growth factor for money compounded at annual interest rates of 14.1​%, 7.5​%, and 1.9​% can be found by computing the geometric mean of 1.141​, 1.075​, and 1.019. Find that average growth​ factor, or geometric mean. What single percentage growth rate would be the same as having three successive growth rates of 14.1​%, 7.5​%, and 1.9​%? Is that result the same as the mean of 14.1​%, 7.5​%, and 1.9​%? The average growth factor is?

Answer 1