So I have a product where the price is is determined by multiplying a base price by a factor that increases by age. So depending on how old someone is when they buy the product the price is different. The factors are out to the 3rd decimal place. (Yes this is the insurance industry). Perhaps this question belongs in different forum my apologies if this is the case.
Example 1: Individual buys 1 plan Base Price is 187.39 factor is 1.087. Everyone agrees consumer pays $203.69 even though the price to the third decimal place is now $203.693. We sensibly round down/truncate here.
Example 2: Individual buys plan for entire family.
a. Subscriber Base price is 187.39, factor is 1.087. Total price rounded =203.69, and rounded to 3rd decimal place is 203.693
b. Dependent 1. base Price is the same, factor is 1.048. The unrounded price is 196.385. Truncated/rounded down is 196.38.
c. Dependent 2. base Price is the same, factor is 0.765. unrounded price is 143.353. The rounded price is 143.35.
The crux of the issue is that according to the almighty excel spreadsheet that everyone except me believes, suddenly the same customer owes the fractional pennies because the sums of the fractional pennies add to a cent. But we truncated/rounded in the prior example. Its not consistent. It is my belief we should be rounding down to 2 decimal places every time we multiply. According to others at work currency should be handled to 3 decimal places.
My counter example was that if multiplication were involved in the pricing of any commodity, pants at the store for example, and I just got pants for myself I don't pay any fractional cents, but suddenly when I buy multiple pants for my kids, I owe an extra cent. Its not like stores display numbers beyond the 2nd decimal place. If I look at my receipt and add the numbers up, it should make...cents ha ha.
I guess another way to phrase the question would be: Are fractional pennies something that can be written off for tax purposes as a loss, or is it just imaginary money like I believe it to be that should be rounded down/truncated?
I guess I could see the argument going the other way if currency is to be handled to the 3rd decimal place like some folks (such as the cast of The Office) allege.
TL;DR In general, is currency handled to the third decimal place?