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.
Formula for Calculating Weighted Average
Mathematical formula for calculating weighted average.
The calculation involves multiplying each value by its weight, summing all products, and dividing the result by the sum of all weights.
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.
Looking for weighted grade average?
If you need to calculate a weighted average of school grades, use our specialized grade average calculator.