=SUMPRODUCT(A1:A10,B1:B10)/SUM(B1:B10) Download Weighted Average Calculation Example Workbook: This is when you can use a variation of SUMPRODUCT Formula like this: In the above average salary example, we dont have weights. However, the above method works only if B1:B10 contains weights in %s totaling to 100%.

So, if you have values in A1:A10 and the corresponding weights in B1:B10, you can use SUMPRODUCT like this to get weighted average. By definition, SUMPRODUCT formula takes 2 or more lists of numbers and returns the sum of product of corresponding values. There is no built-in formula in Excel to calculate weighted averages. How to calculate weighted average in Excel? So, the correct average would be $76k as shown above. You have not considered the number of employees in each department before calculating the average. You are a happy boss to find that your employees are making $330k per year.Įxcept, you are wrong. Now, the average salary seems to be $ 330,000.

You asked each department head to give you the average salary of that department to you. Now you are looking annual salary report and being the numbers-gal you are, you wanted to find-out the average salary of your employees. assume you are the CEO of ACME Widgets co. Well, it is because, in some situations normal averages give in-correct picture. Or in other words, why you should not calculate normal average? Why should you calculate weighted average? If all the weights are equal, then the weighted mean is the same as the arithmetic mean. The weighted mean is similar to an arithmetic mean …, where instead of each of the data points contributing equally to the final average, some data points contribute more than others.

Weighted average or weighted mean is defined as , Today we will learn how to calculate weighted averages in excel using formulas.

Assigning weights to variables in excel