How To Calculate Geometric Average Return Complete Guide

how to calculate geometric average return. To calculate the geometric mean we take their product instead. Using the sample numbers above 2000 1000 1 5 - 1 2 02 - 1 and.

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2 V 2 500. The brute force way of calculating average annual returns if we assume that compounding takes place annually of initial sum V 0 growing to V n over n years is. This is equivalent to raising 19500 to the 15-th power.

We would just sum the numbers 1 5 10 13 30 and then divide by 5 giving us an arithmetic mean of 1180.

Compute F P 1 N - 1. 3000033000 12 314633. Geometric average return can be calculated using the following formula. Times 1 r_n - 1.

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