Introduction to Quantitative Methods

SUMMARY: Interpolation and extrapolation are statistical methods of estimation and forecasting. Interpolation is a statistical technique, which through a study of the time series of known figures of population allows us to make a data insertion between a given data set. On the other hand, extrapolation allows us to forecast or anticipate a value for some future date.

While interpolation helps in completing the incomplete, lost or destroyed records, extrapolation is helpful in those circumstances where forecasting and prediction are required. Businessmen, administrators, sociologists, economists and financial analysts widely use interpolation and extrapolation. The two methods of interpolation are - graphical method and the linear approximation method.