Chapter 4 – Averages
The following chapter has been adapted from Business Math: A Step-by-Step Handbook, 2021A version, Jean-Paul Olivier.
OBJECTIVES
- Calculate the simple average of a set of values.
- Calculate the weighted average of a set of values.
CHAPTER OUTLINE
4.1 Simple and Weighted Averages
4. Review Exercises
4. Self-Test
4. Case Study – Lightning Wholesale
Introduction
Why Do We Need to Know about Averages?
No matter where you go or what you do, averages are everywhere. Let’s look at some examples:
- Three-quarters of your student loan is spent. Unfortunately, only half of the first semester has passed, so you resolve to squeeze the most value out of the money that remains. But have you noticed that many grocery products are difficult to compare in terms of value because they are packaged in different-sized containers with different price points? For example, one tube of toothpaste sells in a 125 mL size for $1.99 while a comparable brand sells for $1.89 for 110 mL. Which is the better deal? A fair comparison requires you to calculate the average price per millilitre.
- Your local transit system charges $2.25 for an adult fare, $1.75 for students and seniors, and $1.25 for children. Is this enough information for you to calculate the average fare, or do you need to know how many riders of each kind there are?
- Five years ago you invested $8,000 in Roller Coasters Inc. The stock value has changed by 9%, −7%, 13%, 4%, and −2% over these years, and you wonder what the average annual change is and whether your investment kept up with inflation.
- If you participate in any sport, you have an average of some sort: bowlers have bowling averages; hockey or soccer goalies have a Goals Against Average (GAA); and baseball pitchers have an earned run average (ERA).
- Averages generally fall into three categories.
- This chapter explores simple, weighted, and geometric averages.
Unless otherwise indicated, this chapter is an adaptation of the eTextbook Foundations of Mathematics (3rd ed.) by Thambyrajah Kugathasan, published by Vretta-Lyryx Inc., with permission. Adaptations include supplementing existing material and reordering chapters.
