#### Step

Gather your data into a data set. This simply means, have all of your values collected in one location. If you are trying to compute the appraised value of a home, you would want to gather the data of other homes in the area with similar attributes, such as number of bedrooms or bathrooms.

#### Step

Weight your data. Simply put, this means assign a weight to each piece of data in the set that you just collected. This can either be done by counting how often a piece of data occurs in the set, or you can use a weight based on your own approach. For instance, if you are calculating the average price you paid for a stock and you bought 30 shares at $15 a share and 50 at $18 a share, then your weights would be 30 and 50 respectively. If instead you are computing the average of an appraisal, then you probably would assign a value based on how similar the comparable homes in the area are to the home you are appraising.

#### Step

Calculate the sum of the weights. The equation to calculate the average when values are weighted is as follows:

(X1xW1 + X2xW2 + ... + XnWn) / (W1 + W2 + ... + Wn)

Where X1, X2, ..., Xn stands for the values in your data set and W1, W2, ... Wn stand for the weights of each associated x-value. The first step is to sum the weights. If, for example, you are trying to find the right appraised value of a home and you have the following data:

House X Value $100,000 - 30 percent weight

House Y Value $130,000 - 40 percent weight

House Z Value $120,000 - 30 percent weight

The sum of the weights would be 30 percent plus 40 percent plus 30 percent, or 100 percent. This value will be used in the final step.

#### Step

Multiply each x-value by the associated weights. Using the information below, you would find:

House X Value $100,000 - 30 percent weight

House Y Value $130,000 - 40 percent weight

House Z Value $120,000 - 30 percent weight

$100,000 x 30 percent = $30,000

$130,000 x 40 percent = $52,000

$120,000 x 30 percent = $36,000

#### Step

Add the values found in the previous step.

$30,000 + $52,000 + $36,000 = $118,000

#### Step

Divide the value from the previous step by the sum of the weights found in step three.

$118,000 / 100% = $118,000

This is your weighted average. For this example, the value $118,000 indicates the appraised value of the home.