Weighted Average Formula – Easy Guide with Examples

📊 When you hear “average,” you probably think of adding numbers together and dividing by how many there are. That’s a simple average. But sometimes, not all numbers should be treated equally — some have more importance or “weight” than others. That’s when we use a weighted average.

🧮 What is a Weighted Average?

A weighted average is an average where each value contributes differently, depending on its importance (or “weight”).
Instead of treating all values equally, we multiply each value by its weight and then divide by the total weight.

This is useful when:

• Some grades count more in your final score than others.
• You want to average prices based on quantities purchased.
• You’re calculating portfolio returns in investing.

📐 Weighted Average Formula

Weighted Average=∑(Value×Weight)∑Weights\text{Weighted Average} = \frac{\sum ( \text{Value} \times \text{Weight} )}{\sum \text{Weights}}

Where:

• Value = the number you’re averaging
• Weight = the importance or frequency of that value
• Σ = “sum of”

📌 Example 1: Student Grades

A student’s final grade is based on:

• Homework: 80% average score (weight 40%)
• Midterm: 70% score (weight 30%)
• Final Exam: 90% score (weight 30%)

Step 1 – Multiply each value by its weight: 80×0.4=32; 70×0.3=21; 90×0.3=27

Step 2 – Add them up: 32+21+27=8032 + 21 + 27 = 80

✅ Weighted Average = 80%

📌 Example 2: Stock Portfolio Returns

You have two stocks:

• Stock A: 5% return, makes up 60% of your portfolio
• Stock B: 8% return, makes up 40% of your portfolio

Step 1 – Multiply return by weight: 0.05×0.6=0.03; 0.08×0.4=0.032

Step 2 – Add them up: 0.03+0.032=0.062

✅ Weighted Average Return = 6.2%

💡 Key Takeaways

• A weighted average gives more importance to some numbers than others.
• Formula: (Value × Weight) / Sum of Weights.
• Useful in grades, finance, business, and statistics.