This formula is a good example of how structured references can make working with data in Excel much easier. At the core, this is what we're doing:
where "first" is a reference to the first cell to include in the average and "last" is a reference to the last cell to include. The result is a range that includes the N cells to average.
To get the first cell in the range, we use INDEX like this:
The array is the entire Sales column, and row number worked by subtracting (n-1) from total rows.
In the example, F4 contains 3, so the row number is 10-(3-1) = 8. With a row number of 8, INDEX returns C12.
To get the last cell we use INDEX again like this:
There are 10 rows in the table, so INDEX returns C14.
The AVERAGE function then returns the average of C12:C14, which is $78.33.