Discussion
In an industry, 10% of the employees have a salary of ₹20,000; 30% a salary of ₹25,000; 50% a salary of ₹30,000; 10% a salary of ₹40,000. What is the average salary?
Answer: A
The average salary is ₹28,500.
Weight each salary by the share of employees earning it:
\[ \begin{aligned} &0.1 \times 20000 + 0.3 \times 25000 \\ &+ 0.5 \times 30000 + 0.1 \times 40000 \\ &= 2000 + 7500 + 15000 + 4000 = 28500 \end{aligned} \]
The simple average of the four salary levels, (20,000 + 25,000 + 30,000 + 40,000)/4 = ₹28,750, ignores the different numbers of employees. ₹36,500 and ₹19,000 lie outside any sensible weighting, and ₹24,000 is too low because half the staff earn ₹30,000.
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