how to calculate average percentage formula in excel

Key takeaways:

Calculating the average percentage of something may seem like an easy task, but this concept can be more complicated than what may initially be assumed. While in some cases you may be able to simply average two percentages by adding them and dividing them by the number of percentages used, in other instances, you may need to consider factors such as sample size.

In this article, we discuss the basics of percentages and how to calculate average percentages, along with real-life examples of how to use the average percentage formula in various scenarios.

In basic terms, percentages are the ratios or proportions of something out of 100. For example, if you have a box of 100 chocolates and 35 of the chocolates are filled with vanilla creme, this would mean that 35% of the chocolates are vanilla creme flavored. Percentages are used in various aspects of daily life, including at school and business settings. Calculating the average of percentages may also be used in a number of different scenarios. For example, an investor may want to determine how two different stocks change over time in relation to each other. To understand this relationship, the investor would need to know how to calculate the average of the two stock percentages.

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Before we can explain how to calculate an average percentage, we must first define how to calculate an average. The average of a set of numbers is simply the sum of the numbers divided by the total number of values in the set. For example, to find the average of 12, 15, 24, 78, 3, 313 and 10, simply sum the numbers (12 + 15 + 24 + 78 + 3 + 313 + 10 = 455) and divide by the total number of values in the set (7) to get an average of 65.

Calculating the average of two or more percentages requires a different set of steps than determining the average of two or more regular numbers. There are several things to take into account when calculating average percentage, including the fact that you often must first calculate the real numbers that a percentage represents.

Use the following steps to calculate average percentage in most cases:

The first step in calculating the average of percentages is to turn the percentages into decimals. For example, let’s say you want to determine the average of 30% of 150 and 25% of 200. You would turn these two percentages into decimals by dividing them both by 100. This means that 30% is 0.3 as a decimal and 25% is .25 as a decimal.

Once you have converted the percentages into decimals, you will then need to find the number that each decimal represents. To do this, you will multiply the decimal by the total number in the sample. So, using the prior example, you would multiply 0.3 by 150 to get 45 and multiply .25 by 200 to get 50.

The next step is to add the two numbers found in the last step together. So, 45 plus 50 equals 95.

You also need to add up the sample sizes for each percentage. So, 150 plus 200 equals 350.

To find the average percentage of the two percentages in this example, you need to first divide the sum of the two percentage numbers by the sum of the two sample sizes. So, 95 divided by 350 equals 0.27. You then multiply this decimal by 100 to get the average percentage. So, 0.27 multiplied by 100 equals 27 or 27%. This means that the average percentage of 30% of 150 and 25% of 200 is 27%.

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The following is the formula that can be used to calculate most percentage averages:

[(Percentage 1 + percentage 2)/(sample size 1 + sample size 2)] x 100 = average percentage

In this formula, percentage 1 represents the decimal value of the given percentage from sample size 1. In order to determine the value of percentage 1, you must first convert the percentage into a decimal and then multiply the decimal by the sample size. Repeat this step to determine the decimal value of percentage 2 in this formula. Once you have calculated the decimal values of each percentage for each given sample size, you then add these decimal values together and divide the total number by the total sum of both sample sizes. You then need to multiply this value by 100 to get the average percentage.

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The following is an example of how to calculate the average of percentages in a real-life scenario:

XYZ Company wants to determine the average percentage of how many products were sold from two different product categories in a given year. In the first product category, the company produced 500 products and sold 75% of them. In the second category, the company produced 400 products and sold 60% of them.

The following steps are taken to determine the average percentage of products sold from both categories: