The Realities of Rounding.

We teach students to round through their years in school.  Most students learn the if the number is four or below, round down and if its five and above, round up.  These are great rules but they don't always work in real life.

In general banks and governments tend to round down if the value is no more than half a cent so $1.245 would round to $1.24 since its a half cent but if its $1.246, it would go up to $1.25. This is particularly true with sales tax, interest, and other situations.  They use the 5 and below rounds down while 6 and above rounds up.

On the other hand, if you calculate the number of cans of paint needed to cover your bedroom and it comes out as 4.1 gallons of paint, you will not round it down, you will round it up to make sure you have enough paint to complete the job.  Usually if its something physical like paint, cloth, tiles, it is accepted that you will round it up.  You always round up so you can finish the job.

I know if I buy yarn and the pattern says I need 3 skeins, I'll buy 4 because I usually mess up and run short.  If I don't buy that extra skein, I'll run out and the store will have run out of that particular dye lot.  When dealing with dye lots, they can vary but a little bit and you notice small differences.  Since I usually have left overs, I keep them and make stripped socks so I have some very unique results.

On the other hand, in accounting there are two different rounding methods they use. First they use decimal precision which tends to follow normal rules of rounding as long as the end result does not effect the representation of values.  If the final values are accurate, you are fine.  The other method is the rounding preferences one where you always round up as long as it does not effect the final values of the overall report.

There are circumstances where rounding down costs the company less money in the long run than rounding up.  If the company pays dividends out of their profit, if the amount rounds up, they end up paying more to its share holders while if it rounded down, it wouldn't effect them that way.

There are apparently some apps out there that will automatically round up your purchases to the next dollar, take the difference and place it in your savings account.  Some deposit the amounts daily so it automatically starts collecting interest while other apps wait until you've accumulated say $5 before they deposit.

There are some countries that have gotten rid of the one cent pieces which make things even more interesting.  If the purchase is paid for by credit card or check, the odd amount such as $1.89 is left alone but if you are paying cash, it will be rounded up to $1.90.  In Australia, they have rules where if its one or two cents, the amount is rounded down to the nearest tens amount but for three and four cents, the amount is rounded up to the nearest five amount.  For six and seven its rounded down to the nearest five and eight and nine get rounded up to the nearest tens. Australia did this to eliminate the one and two cent pieces from their currency.

However, when rounding Grade Point Averages, the rounding is only done to one place and it has to either go up or down one place.  For instance if your GPA is 3.32, it rounds to 3.4 but if the GPA is a 3.49, it would go up to 3.5 and a 3.99 or a 3.935 rounds to 3.9 because a 4.0 is only a 4.0 and you can't round up to it.

So now we've seen various ways rounding is used in real life and it doesn't always follow the rules we teach in school.  The method of rounding depends on the contextual situation and that varies wildly across the board.

Let me know what you think, I'd love to hear, have a great day.