# The geometric mean is often used in business and economics for finding average rates of change, average

## 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 10%, 5%, and 2% can be found by computing the geometric mean of 1.10, 1.05, and 1.02. Find that average growth factor. What single percentage growth rate would be the same as having three successive growth rates of 10%, 5%, and 2%? Is that result the same as the mean of 10%, 5%, and 2%?

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