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weighted average
Message posted by peter robbins on November 19, 1999 at 12:00 AM (ET)
How do you calculate a weighted average?
i.e. $10,000 @ 24%
$ 2,000 @ 6%
Average interest rate is 15%
Weighted average % rate is ?
Thanks
READERS RESPOND:
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Re: weighted average
Message posted by JG on November 19, 1999 at 12:00 AM (ET)
Treat the 'weight' as a frequency and then just calculate the average. Basically, 'average' is a slippery concept. In depends on two factors: one - what do you mean by average and two over what population are we averaging.
Re: weighted average
Message posted by JG on November 19, 1999 at 12:00 AM (ET)
In your example the average per $ is 21% and the average per transaction is 15% , neighter is necessarily the 'right' average.
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