Do I really need to round, in my case?

[skygal]

Hello,
I am working on the budget for my new workplace. In the excel spreadsheet all of the totals have this type of rounding formula: =ROUND(SUM(G194:G197),5)
If I understand rounding correctly - the 5 at the end is there to round the number off to 5 positions past the decimal point. Am I correct in this assumption? If so, since all my numbers are dollar amounts, and none of them are two digits past the decimal point - why do I even need the rounding part? Can't I just use =SUM(G194:G197) ?

Thanks for your help,
Linda

[Jonmo1]

There's an issue with floating point accuracy documented by microsoft (you can google it).
It has to do with how a binary system (computers) can't always store decimal values with precise accuracy.

So sometimes math performed on many decimal values will be off by an infantismal amount, like the answer should be 10.25
But Excel returns 10.250000000001

This is commonly resolved by using the ROUND.

You could change the 5 to a 2 though if you want (you are correct about what the 5 was for)

[skygal]

Ahhh... I see. I'm glad I asked. I will still round, but change it to a 2.
Thank you so much!

[shg]

No so relevant to budgets, perhaps, but financial transactions are performed to the penny; if you owe $101.023 in interest, you pay 101.02, and the balance is also at the nearest penny -- so calculations should be rounded to the nearest penny: =round(calculation, 2)

[skygal]

Yes, I see where that would make sense as well.
Thanks!

[AlKey]

Unless you need to analyze data related to buying/selling stock or currency or other financial products offered by banking institutions, using 2 decimal point rounding is all you need.