# Geometric Mean definiton, formula and applications

Definition

The Geometric mean is a special types of average where we calculate the root of the product of a value of a set of observations. It is usually used to define various types of growth rates such as population growth, interest rates etc.  By formula,

G.M =

Where, G.M=geometric mean

n=number of observations

### The situation where we use geometric mean

The geometric mean is the most appropriate measure of location when,

It is appropriate for averaging the ratios of change, for average of proportions, etc.

There are some merits of the geometric mean-

• Geometric mean is least affected by extreme values.
• It is based on all observations of the set.
• It is suitable for further algebraic treatment.