Geometric Mean

The geometric mean is a method of finding the average rate of return or growth over multiple periods, especially when dealing with numbers that multiply together, like percentages or ratios. Unlike the arithmetic mean, which adds numbers and divides by the total, the geometric mean multiplies all the values together and then takes the root corresponding to the number of values. It gives a central value that accurately reflects the typical growth rate of a set of positive numbers, making it useful in contexts like finance, biology, and engineering where growth compounding is involved.