This is the most popular of all the averages cited above. For a common man, average means this arithmetic average. Hence, when nothing is specifically mentioned, and ‘average’ should be construed as the arithmetic average. This average is also shortly called as Mean. This average is so popular because, it satisfies of the requisites of an ideal average viz. simplicity, rigidity, etc.
An arithmetic average may be defined as the quotient obtained by dividing the total of the values of a variable by the total number of their observations, or items.
The fundamental formula for its calculation is, therefore, given as follows:
X = ∑x/N
Where, X = arithmetic average
X = Value of a variable
∑x = Sum of the values of a variable and N = Total number of observations or items.
Methods of Computation
There are four different methods of computing the arithmetic average of a series:
- Direct method
- Short-cut method
- Step deviation method
- Short method.