We can use the **GEOMEAN function** to **calculate the average rate per period** for a set of values that is **compounded over multiple periods**. The geometric mean is the average rate of return of a set of values calculated with the products of the terms. The steps below will walk through the process.

*
Figure 1- Final result of the GEOMEAN function*

**Syntax**

**=GEOMEAN(number1, [number2], ...)**

**number1**: This is a number or cell reference that refers to the first value**number2**[optional]: This is a number or cell reference that refers to the second value

**Formula**

**=GEOMEAN(C5:C16)**

**Setting up the Data**

We will calculate the geometric mean for the sales of year the **2018** and **2019** in **figure 2.**

**The months will be entered into Column B****Column C and D**contain the**Sales**for**2018**and**2019**respectively- The
**Geometric mean sales**for each year will be returned in**Column G**

*Figure 2 – Setting up the Data*

**Geometric Mean Sales for 2018 and 2019**

- We will click on
**Cell G5** - We will insert the formula below into
**Cell G5**

**=GEOMEAN(C5:C16)** - We will press the
**enter**key

* Figure 3- Geometric Mean Sales for 2018*

- We will click on
**Cell G5**again - We will
**double click**on the fill handle tool which is the small plus sign you see at the bottom right of**Cell G5.**Select and drag down to copy the formula to**Cell G6**.

* Figure 4- Geometric Mean Sales for 2018 and 2019*

**Explanation**

**=GEOMEAN(30000,33000)** returns **31464.3**

The **GEOMEAN **function calculates the geometric mean of a set of numbers by returning the **nth **root of** n** numbers. Hence, the **Geomean** of 30000 and 33000 is calculated as:

`=(30000*33000)^(1/2)`

`=`

**31463.3**

The arithmetic mean would be `(30000 + 33000)/2 = `

`31500`

.

**Note**

- Any empty cell and cell with logical values within the range are ignored by the
**GEOMEAN Function** - The
**GEOMEAN Function**can treat up to 255 different arguments. These arguments include**numbers**,**cell references,****ranges, arrays,**and**constants.**

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