Weighted average formula
Financial acronyms
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Description of the Weighted average formula
The formula below allows you to calculate the weighted average of a series of data points.
To calculate a weighted average, you must first multiply the values in the list by their respective weights and then add them together. Once you have this sum, divide it by the total sum of all weighting factors to get the weighted average.
Formula
\[ \overline{x} = \frac{ \sum_{i=1}^{n} ( w_{i} \cdot x_{i} ) } { \sum_{i=1}^{n} w_{i}} \ \]
Symbols
\(n\ \)
Number of data points
\(w\ \)
Data point weighting factor
\(x\ \)
Data point from the series