How to Calculate the Arithmetic Average

The formula used to calculate the arithmetic average is as follows:

arithmetic average formula

The arithmetic average is the sum of all of the values in a data set divided by the total number of observations.

Assume that you are presented with the following mutual fund expense ratios:

  • Fund One – 0.75%
  • Fund Two – 0.08%
  • Fund Three – 1.15%
  • Fund Four – 0.90%
  • Fund Five – 0.14%

Using these values, we can calculate the arithmetic average as follows:

arithmetic average calculation

Using an HP12C calculator, we can calculate the arithmetic average using the following keystrokes:

hp12c

[.75][Σ+]
[.08][Σ+]
[.015][Σ+]
[.009][Σ+]
[.0014][Σ+]
[g][x-bar]

0 thoughts on “How to Calculate the Arithmetic Average”

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