The arithmetic mean or simple average is calculated by adding up all the numbers whose average is needed, and dividing the aggregate by the number of numbers.
For example, the arithmetic mean of 4,8 and 16 is (4+8+16) ÷3 = 9.3.
The arithmetic mean is simple to calculate, and for many purposes it is the most suitable alternative. It is not always appropriate. For example, growth rates should be averaged using the geometric mean: see compound annual growth rate .