An appraiser's reconciliation produces a calculated figure of $413,150, and the final opinion is reported to the nearest $1,000. What is the reported amount?
Correct Answer
B) $413,000
The stated reporting increment is $1,000. Rounding $413,150 to that increment gives $413,000. That increment is a fact of this assignment and does not prescribe the precision for every appraisal.
Why This Is the Correct Answer
Option B is correct because $413,150 divided by 1,000 is 413.15, which rounds to 413, and 413 × 1,000 = $413,000. The remainder of $150 is below the $500 midpoint, so the figure rounds down. The $1,000 increment is stated here; it does not prescribe precision for every appraisal.
Why the Other Options Are Wrong
Option A: $413,150
Option A's $413,150 is the unrounded calculation. The figure called for is the one reported to the nearest $1,000, which is $413,000.
Option C: $414,000
Option C's $414,000 rounds up as if the $150 remainder reached the $500 midpoint. Because 413.15 rounds to 413, the correct result is $413,000.
Option D: $410,000
Option D's $410,000 rounds to the nearest $10,000 instead of the nearest $1,000: the $3,150 above $410,000 is below $5,000, so that increment gives $410,000. The stated increment is $1,000, which gives $413,000.
Under half goes down
When rounding to $1,000, a remainder under $500 rounds down and $500 or more rounds up.
How to use: Use this for any nearest-increment rounding question.
Exam Tip
Confirm the increment first, then look only at the digit just below it; for nearest $1,000, that is the hundreds digit.
Common Mistakes to Avoid
- -Reporting the unrounded calculated figure
- -Rounding up when the remainder is below the midpoint
- -Rounding to a larger increment than the one stated
Concept Deep Dive
Analysis
This question tests applying a stated rounding increment correctly. You round $413,150 to the nearest $1,000 by looking at the hundreds digit. Since $150 is less than $500, the figure rounds down to $413,000.
Background Knowledge
Appraisers round final values to reflect the precision the evidence supports. Rounding to a stated increment means choosing the nearest multiple of that increment. The appropriate increment depends on the data and assignment requirements.
Real-World Application
An appraiser's weighted reconciliation produces $413,150, and the assignment calls for reporting to the nearest $1,000. The appraiser reports $413,000. The report notes the rounding so the reader understands the final figure.
More Reconciliation Questions
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