Weighted average

A weighted average is an average where each value counts in proportion to an assigned importance, called its weight, instead of counting equally. Each value is multiplied by its weight, the products are added, and the sum is divided by the total of the weights. Class grades, GPAs, and stock indexes are all weighted averages.

Example: scores of 92, 85, and 88 with weights of 30, 30, and 40 give (92 x 30 + 85 x 30 + 88 x 40) / 100 = 88.3. The plain average of the same scores is 88.33, but if the heaviest score dropped to 78, the weighted average would fall to 84.3 while the plain average only fell to 85.

The weighted average formula in plain words: multiply each value by its weight, add up the products, then divide by the sum of the weights. In a spreadsheet the whole calculation fits in one cell, since Excel's SUMPRODUCT function multiplies and adds in a single pass: SUMPRODUCT of the values and weights, divided by SUM of the weights.