The evidence and assignment expressly support reporting to the nearest $1,000. Round the unrounded indication of $307,400 to that increment. What should be reported?
Correct Answer
A) $307,000
307400 / 1000 = 307.4; round to 307 whole thousands, giving 307000. Common errors: rounding up instead of to the nearest $1,000 gives $308,000; not rounding gives $307,400; rounding to the nearest $10,000 gives $310,000.
Why This Is the Correct Answer
Option A is correct because $307,400 ÷ 1,000 = 307.4, which rounds to 307 whole thousands, or $307,000. Rounding to the nearest $1,000 means going to the closer thousand, and $307,000 is $400 away while $308,000 is $600 away.
Why the Other Options Are Wrong
Option B: $307,400
Option B, $307,400, is wrong because it does not round at all. The assignment calls for reporting to the nearest $1,000, which gives $307,000.
Option C: $308,000
Option C, $308,000, is wrong because it rounds up instead of to the nearest $1,000. Since 307.4 thousand is closer to 307 than to 308, the correct figure is $307,000.
Option D: $310,000
Option D, $310,000, is wrong because it rounds to the nearest $10,000 instead of the nearest $1,000. Rounding $307,400 to the nearest $1,000 gives $307,000.
Under 500, round down
When rounding to the nearest thousand, look at the hundreds: below 500 rounds down, 500 or more rounds up.
How to use: Use this for any question that asks for a value rounded to the nearest $1,000.
Exam Tip
Confirm the rounding increment in the question before choosing between nearby rounded figures.
Common Mistakes to Avoid
- -Rounding up regardless of the hundreds digit
- -Rounding to a larger increment than the assignment supports
- -Reporting an unrounded figure that implies false precision
Concept Deep Dive
Analysis
This question tests rounding a value indication to a stated increment. The assignment supports reporting to the nearest $1,000, so $307,400 is rounded to the closest whole thousand. Since $400 is less than $500, the figure rounds down.
Background Knowledge
Appraisers often round final value indications to reflect the precision the data actually supports. The rounding increment should fit the evidence and assignment, and once an increment is set, ordinary rounding to the nearest unit applies.
Real-World Application
After reconciling her sales comparison grid, an appraiser arrives at an unrounded indication of $307,400. Because her data supports precision to about a thousand dollars, she reports $307,000.
More Sales Comparison Questions
Which stated cause of supported value loss is external?
Improvement cost new is $450,000. Separately supported improvement depreciation deductions of $45,000, $25,000, $15,000 are expressly nonoverlapping and not already excluded from cost new. Add supported site value of $125,000, already reflecting any site losses. What total indicated value results?
Which two depreciation categories may each be classified as curable or incurable by comparing the cost to remedy a deficiency with the value gained?
Improvement cost new is $800,000. Separately supported improvement depreciation deductions of $120,000, $80,000, $40,000 are expressly nonoverlapping and not already excluded from cost new. No site is included. What depreciated improvement amount results?
The principle of anticipation in real estate valuation states that:
Which highest-and-best-use criterion addresses whether a proposed use is allowed by zoning and applicable legal restrictions?
Three comparables produce adjusted indications of $312,000, $309,000 and $315,000, requiring gross adjustments of 9%, 14% and 22% respectively. Verification also establishes that the first sale is the closest competitive substitute and its adjustments are better supported than the other two. Which indication deserves the most weight on those facts?
When reconciling value indications from the three approaches to value, an appraiser should:
A property sold at a cash-equivalent price of $1,062,500. Its stabilized annual NOI is $85,000. What is the indicated overall rate?
In reconciliation, an appraiser should:
People Also Study
Real Estate Market
13.6% of exam
Property Description
11.8% of exam
Land or Site Valuation
4.5% of exam
Cost Approach
13.6% of exam
Income Approach
8.2% of exam
Related Tools
Previous Question
A verified comparable closed at $240,000. The buyer later spent $18,000 replacing its roof. What verified closed sale price should be recorded before any separate supported condition adjustment?
Next Question
Which approach most explicitly converts expected future monetary benefits into present value?