Weighted Average Calculator
Average values that have different weights.
Average where some values count more than others (e.g. graded by credit hours).
How the Math Works
A weighted average extends the concept of a simple average by assigning different levels of importance, or 'weights', to each value in a dataset. To calculate it, you multiply each individual value by its corresponding weight, sum all these products together, and then divide by the sum of all the weights. This process effectively gives more influence to values with higher weights, producing an average that better reflects the relative significance of each data point.
Practical Applications
Weighted averages are essential when combining data sets of different sizes or when certain data points are more significant than others. For example, when calculating a class's final grade, assignments might be worth 30% of the grade while exams are worth 70%. In finance, investors use weighted averages to calculate the average cost of shares purchased at different prices over time, giving more weight to larger transactions. This method ensures that more substantial or important data points appropriately influence the final result.
Day-to-Day Use
Weighted averages help you make better decisions in everyday situations. When comparing prices from different retailers, you might use a weighted average based on how much you typically purchase from each store to determine your best overall value. In personal finance, weighted averages help calculate your effective interest rate across multiple credit cards or loans. Even when rating products or services, understanding weighted averages can help you interpret review scores that factor in different aspects like quality, price, and customer service with varying levels of importance.
Worked example
90×0.5 + 80×0.3 + 70×0.2 = 83.
FAQ
Do weights need to sum to 1?
No — they're normalized by dividing by the total weight.