The Excel AVERAGE function returns the arithmetic mean of a list of supplied numbers.
The syntax of the function is:
where the number arguments are a set of one or more numeric values, or arrays of numeric values, for which you want to calculate the average.
In current versions of Excel (Excel 2007 and later), you can provide up to 255 number arguments to the Average function, but in Excel 2003, the function can only accept up to 30 arguments. However, each argument can consist of an array of values or a range of cells, each of which can contain multiple values.
The Excel Average Function is very similar to the Excel Averagea Function. The only difference between these two functions is the way in which logical values, or text values within arrays or references are treated in the calculation of the arithmetic mean. This is shown in the table below:
AVERAGE Function  AVERAGEA Function  

Logical values or text representations of numbers, typed directly into the list of arguments 
ARE counted (TRUE=1, FALSE=0) 
ARE counted (TRUE=1, FALSE=0) 
Text that cannot be interpreted as a number, typed directly into the list of arguments  #VALUE! error  #VALUE! error 
Logical values, within arrays or reference arguments  Ignored  ARE counted (TRUE=1, FALSE=0) 
Text (including empty text "", text representations of numbers, or other text), within arrays or reference arguments  Ignored  Counted as zero 
Empty cells  Ignored  Ignored 
Cells B1B4 of the spreadsheets below show the Excel Average function used to calculate the arithmetic mean of the numbers 8, 7, 9, 6 & 10. In each case, the values are supplied to the function in different ways.
Formulas:

Results:

The examples in the above spreadsheets show that each argument to the Average function can be supplied as a single value or cell, or as an array of values or cells (note that in cell B2, the argument {8,7,9} is an array of numbers).
For further examples of the Excel Average function, see the Microsoft Office website.
If you get an error from the Excel Average function, this is likely to be one of the following:
#DIV/0!    Occurs if the values to be averaged are all nonnumeric. 
#VALUE!    Occurs if any of the arguments that are supplied directly to the Average function can not be interpreted as numeric values. 