Weighted Average
Calculator for weighted average in finance, statistics, and data. Enter values and weights.
Applications - Finance (portfolio average price), Statistics (weighted data average), Education (grade average with weights).
Decimal numbers - the calculator supports decimal numbers. Use comma or period as separator.
Bulk import - paste a space-separated list of values into the first field. The same applies for weights.
Result
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Applications - Finance (portfolio average price), Statistics (weighted data average), Education (grade average with weights).
Decimal numbers - the calculator supports decimal numbers. Use comma or period as separator.
Bulk import - paste a space-separated list of values into the first field. The same applies for weights.
Formula for Calculating Weighted Average
Mathematical formula for calculating weighted average.
Weighted Average = (value1 × weight1 + value2 × weight2 + ...) / (weight1 + weight2 + ...).
Example: (8 × 2 + 6 × 1 + 9 × 3) / (2 + 1 + 3) = 49 / 6 = 8.17
The calculation involves multiplying each value by its weight, summing all products, and dividing the result by the sum of all weights.
Definition of Weighted Average
Weighted average is a statistical measure that accounts for the different importance of individual values.
Unlike arithmetic average where all values have the same weight, weighted average assigns each value a specific weight (importance). Values with higher weights influence the result more than values with lower weights.
Weighted average is used in many fields - from finance and statistics, through portfolio valuation, to calculating grade averages in school.
Where is weighted average used?
Weighted average has wide practical applications.
- Finance and Investments: When calculating the average stock price in a portfolio, where different stocks have different weights depending on investment size.
- Academic Grades: When calculating grade averages, where different subjects or exams have different weights (importance).
- Statistics and Research: In surveys and research, where different respondent groups have different weights depending on their representation in the population.
Frequently Asked Questions About Weighted Average
- What is the difference between arithmetic and weighted average?
- Arithmetic average adds all values and divides by the count. Weighted average also considers the importance (weight) of each value - values with higher weights have more influence on the result.
- How to calculate weighted average in Excel?
- In Excel use the formula =SUMPRODUCT(values, weights)/SUM(weights). For example: =SUMPRODUCT(A1:A3, B1:B3)/SUM(B1:B3) calculates the weighted average of values in A1:A3 with weights in B1:B3.
- Does the sum of weights need to be 100%?
- No, weights can be any positive numbers (1, 2, 3 or 10%, 30%, 60%). The formula divides by the sum of weights, so the result is correct regardless of the scale used.
- When to use weighted average instead of arithmetic?
- Use weighted average when individual values have different importance or represent different sized groups. For example, when calculating grade averages with different subject weights.
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