Because the final estimate is a result of several calculations, the degree of precision used in the calculations could alter the final value. Therefore, it is important to remain consistent throughout the calculations. Also, consistency in rounding across appraisals is important for HUD to remain fair in determining insurance eligibility. Numbers are rounded to the least precise number used in calculations.
Significant digits determine the precision of the numbers used in calculations.
Significant numbers determine precision because precision is the closeness of the measurement, not the degree of accuracy.