Average | QFinance

Average (or arithmetic mean or simply mean) is the sum of the numbers divided by total numbers.

$\textrm{Average}=\frac{\textrm{sum}}{n}$

Example 1. What is the average of the numbers: 3, 8, 0, 2, 2, 0, 10 and 7?

Here, total number of observations are: n = 8. Hence,

$\textrm{Average}=\frac{3+8+0+2+2+0+10+7}{8} \newline = 4$

Average of Percentages

The average of percentages is calculated in the same manner. The formula is,

$\textrm{Average of Percentages}=\frac{\textrm{sum}}{n}\%$

Example 2. What is the average of 7%, 10% and 4%?

Here, total number of observations are 3, i.e. n=3

$\textrm{Average}=\frac{7+10+4}{3}\% \newline = 7\%$