The Excel GEOMEAN function returns the geometric mean for a set of numeric values. Geometric mean can be used to calculate average rate of return with variable rates.
Calculate geometric mean
=GEOMEAN (number1, [number2], ...)
number1 - First value or reference.
number2 - [optional] Second value or reference.
The Excel GEOMEAN function calculates the geometric mean. Geometric mean is the average rate of return of a set of values calculated using the products of the terms. The general formula for the geometric mean of n numbers is the nth root of their product. For example:
To calculate Compound Annual Growth Rate (CAGR) in Excel, the average rate of return for an investment over a period of time, you can use several approaches. In the example shown, the formula in H7 is:
The Excel HARMEAN function returns the harmonic mean for a set of numeric values. The harmonic mean is the reciprocal of the arithmetic mean of reciprocals. Harmonic mean can be used to calculate a mean that reduces the impact of outliers.
The Excel RRI function returns an equivalent interest rate for the growth of an investment. You can use RRI to calculate Compound Annual Growth Rate (CAGR) in Excel.
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