ScottPletcher (9/5/2012)
To be fair, higher precision in intermediate calculations in complex equations can in fact cause errors rather than solving them.
yes, but here we are looking at a YTD calculation, which should involve only addition and no rounding.
I'm certainly no authority on currency laws, so I can't speak to that.
Neither am I, but I have come across some financial regulations and I am sure there was no ban on using floating point in any of it. Of course I don't know US rules, they may be different.
But, from a mathematics standpoint, suppose all intermediate results are supposed to be rounded to 4 decimal places, but instead you carry them out further, say to 8 places. You've changed the intermediate results, which with large multiples of iteration -- such as for interest calculations, etc. -- could change the final result from what it would have been with different rounding of intermediate calcs.
Yes, cases where rounding of intermediate results is required mean that if that rounding isn't automatic the flow has to be interrupted to allow it to be done; however, it's usually true that a point at which rounding is required is also a point for which a permanent record is required anyway, so that this is no big deal - flow is interrupted to create a permanent record, so the forced rounding doesn't add any extra interruptions. There may be cases where this isn't the case, but I haven't come across any such case.
An interest calculation with large multiples of iteration is an interesting case - interest is usually defined over some fairly long period (a month, or a quarter, or half a year, or a year) and the rules for calculation and documentation generally mean that the number of interest steps applied in between recorded points is one, ie it's exactly the general case pointed out as usual above; if interest has to be calculated for less that a period, the relevant fraction of the base period is used, not iterations over some smaller unit than that fraction, so that doesn't involve any iteration either. So it seems odd for a case of large multiple iterations to happen in interest calculation - except of course where one is producing an illustration of total cost over a long period, where the neccessity for doing the rounding at each step can be a pain.
Tom