Weighted average is similar to Arithmetic Mean or average. In case of weighted average, some values play are important than other values while in arithmetic mean each value contributes to final average. Weighted Average Definition states that a common term called ‘weight’ is used in case of weighted average which indicates that some values have greater contribution (weight) in determining the average.
If in case all values are equal (if all the weights are same) then mean will be called as arithmetic mean. Weighted average usually refers to weighted arithmetic mean in which weight of some values is greater as compared to others and these weighted values effects the average.
In weighted average method, a weight is assigned to values which can be any value out of all values. Multiply this weight by the value to which it is assigned and add all other remaining values to it. Then divide by the size of remaining values and add weight to it for finding out weighted average.
Suppose we want to find out weighted average of marks of 5 students which are 2, 5, 7, 9 and 8.
Here we are assigning 10 to first value which is 2 then sum will be given as
(10 * 2) + 5 + 7 + 9 + 8 = 49 and size will be 10 (weight) + 4 (size of the last four values) = 14
Then weighted average (W) = 49 / 14 = 3.5.