A value calculation produces $235,849, and the appraiser reports the result to the nearest $1,000. What is the reported amount?
Correct Answer
D) $236,000
The stated reporting increment is $1,000. Rounding $235,849 to that increment gives $236,000. That increment is a fact of this assignment and does not prescribe the precision for every appraisal.
Why This Is the Correct Answer
Option D is correct because rounding $235,849 to the nearest $1,000 gives $236,000. The remainder above $235,000 is $849, which is at least $500, so the value rounds up: round(235,849 ÷ 1,000) × 1,000 = 236 × 1,000 = $236,000.
Why the Other Options Are Wrong
Option A: $235,849
Option A is wrong because $235,849 is the unrounded calculation result. The question asks for the amount reported to the nearest $1,000, which is $236,000.
Option B: $240,000
Option B, $240,000, rounds to the nearest $10,000 instead of the nearest $1,000: the $5,849 above $230,000 is at least $5,000, so that increment gives $240,000. The stated increment is $1,000, which gives $236,000.
Option C: $235,000
Option C is wrong because $235,000 results from truncating, simply dropping the last three digits, rather than rounding. Because $849 is at least $500, the figure rounds up to $236,000.
Five hundred rounds up
When rounding to the nearest thousand, look at the last three digits: 500 or more rounds up, less than 500 rounds down.
How to use: Use this on any question that asks you to round a value to a stated increment.
Exam Tip
Confirm the increment before rounding, and distinguish rounding from truncating: if an answer simply drops the trailing digits, check whether the remainder is large enough to round up.
Common Mistakes to Avoid
- -Truncating instead of rounding
- -Reporting the unrounded figure when an increment is specified
- -Rounding to the wrong increment
Concept Deep Dive
Analysis
This question tests rounding to a stated reporting increment. Rounding $235,849 to the nearest $1,000 depends on the hundreds digit: 849 is $500 or more, so the figure rounds up. The increment is stated here; it does not prescribe precision for every appraisal.
Background Knowledge
Appraisers often round final value opinions to reflect the precision the data support. Rounding to the nearest increment means choosing whichever multiple of that increment is closest to the calculated number. The appropriate increment depends on the assignment and market, and here it is stated.
Real-World Application
An appraiser's reconciled analysis produces $235,849 for a condominium unit. Following the client's reporting convention, the appraiser reports a final opinion of $236,000 and keeps the unrounded calculation in the workfile.
More Reconciliation Questions
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