Excel: calculate weighted average - how it works

A weighted average is easy to calculate in Excel. In this article we show you how to do it.

Excel: calculate weighted average - how it works

To calculate the weighted average in Excel, you need the "Sum product" and "Sum" functions. The average depends on the weight you assigned.

• Example: You want to calculate the average price of a pencil. In the first order, ten pens cost ten cents each. In the second order, 15 pens cost nine cents each.
• When calculating the simple mean, it is not taken into account that a larger number of pens have been sold for nine cents.
• With the formula "= SUM PRODUCT (individual values; weighting components) / TOTAL (weighting components)" you can calculate the weighted average, which is more accurate.

In our next article, we'll explain how to calculate variance and standard deviation in Excel.