Calculating Weighted Averages in Excel Using Sumproduct - Quick Tutorial
Hey everyone! The takeaways from this video are that the function '=sumproduct()' is used alongside the '=sum()' function to calculate weighted averages for any given data set
The function '=sumproduct()' will take any amount of columns (or rows) of the same size and multiply the the entries of each column for a given row by each other and then add them with the multiplied entries of each column for the next row in the range of values.
i.e. Sumproduct(A1:A3,B1:B3) will be doing the following calculations
(A1 * B1) + (A2 * B2) + (A3 * B3)
After doing the sumproduct of our value column and our return column, we use sum() to find the total value invested. We then divide our sumproduct by the sum to get the weighted average.
I hope this video helps. Thanks for watching and stay tuned for more!