2.5 Geometric Mean
Multiplicative averaging for growth rates and investment returns, the nth-root formula, and when compounding makes an ordinary average misleading.
13 exercises
2.5 Exercise 1
What is the geometric mean of the data set given? 5, 10, 20
2.5 Exercise 2
What is the geometric mean of the data set given? 9.000, 15.00, 21.00
2.5 Exercise 3
What is the geometric mean of the data set given? 7.0, 10.0, 39.2
2.5 Exercise 4
What is the geometric mean of the data set given? 17.00, 10.00, 19.00
2.5 Exercise 5
What is the average rate of return for the values that follow? 1.0, 2.0, 1.5
2.5 Exercise 6
What is the average rate of return for the values that follow? 0.80, 2.0, 5.0
2.5 Exercise 7
What is the average rate of return for the values that follow? 0.90, 1.1, 1.2
2.5 Exercise 8
What is the average rate of return for the values that follow? 4.2, 4.3, 4.5
2.5 Exercise 9
An investment grows from $10,000 to $22,000 in five years. What is the average rate of return?
2.5 Exercise 10
An initial investment of $20,000 grows at a rate of 9% for five years. What is its final value?
2.5 Exercise 11
A culture contains 1,300 bacteria. The bacteria grow to 2,000 in 10 hours. What is the rate at which the bacteria grow per hour to the nearest tenth of a percent?
2.5 Exercise 12
An investment of $3,000 grows at a rate of 5% for one year, then at a rate of 8% for three years. What is the average rate of return to the nearest hundredth of a percent?
2.5 Exercise 13
An investment of $10,000 goes down to $9,500 in four years. What is the average return per year to the nearest hundredth of a percent?
Adapted from Introductory Business Statistics 2e © 2023 Rice University. Licensed under CC BY 4.0. Source: Introductory Business Statistics 2e. Imported at revision 50ec917.