How to use GEOMEAN function in excel
The correct answer and explanation is :
The GEOMEAN function in Excel calculates the geometric mean of a set of numbers. The geometric mean is useful in cases where values have different ranges or when dealing with percentages, rates, or ratios.
Syntax:
=GEOMEAN(number1, [number2], ...)- number1, number2, …: These are the numeric values for which you want to calculate the geometric mean. You can input numbers directly or use cell references.
Example Usage:
Let’s say you have the following values in cells A1:A5:
5
10
15
20
25To find the geometric mean, use:
=GEOMEAN(A1:A5)Excel will return 13.79, which is the geometric mean of these numbers.
How the GEOMEAN Function Works
The geometric mean is calculated using the formula:
[
GM = \sqrt[n]{x_1 \times x_2 \times x_3 \times … \times x_n}
]
Where:
- x₁, x₂, …, xₙ are the numbers in the dataset.
- n is the total number of values.
For the example above:
[
GM = \sqrt[5]{5 \times 10 \times 15 \times 20 \times 25} = 13.79
]
When to Use the GEOMEAN Function
- Calculating average growth rates (e.g., stock returns, population growth).
- Computing performance metrics where values are multiplicative.
- Analyzing compounded rates (e.g., interest rates, inflation).
📌 Note: All numbers must be positive because the geometric mean does not work with zero or negative numbers.
