Course Home 3.2.37 Question Help tice without affecting your score The geometric
ID: 3048110 • Letter: C
Question
Course Home 3.2.37 Question Help tice without affecting your score 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 10.1%, 5.1%, and 2.9% can be found by computing the geometric mean of 1.101, 1.051, and 1.029. Find that average growth factor, or geometric mean. What single percentage growth rate would be the same as having three successive growth rates of 10.1%, 5.1%, and 29%? Is that result the same as the mean of 10.1%, 5.1%, and 2.9%? Study Plan Data Sets od Stacrunch Chapter Conten Tools for The average growth factor is (Round to four decimal places as needed.)Explanation / Answer
Answer
Geometric Mean of 1.101, 1.051 and 1.029
= (1.101 x 1.051 x 1.029)1/3
= cube root of 1.190708
= 1.059909
=> average growth factor = 5.9909% ANSWER 1
Mean of 10.1%, 5.1% and 2.9% = 6.03% ANSWER 2