# Why do we round cash to two decimal points? **URL:** \ **Category:** Factual Questions\ **Created:** [March 20, 2021, 11:39pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328 "2021-03-20T23:39:31Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![ekedolphin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ekedolphin/32/10003_2.png) [@ekedolphin](https://boards.straightdope.com/u/ekedolphin)\ **Post date:** [March 20, 2021, 11:39pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/1 "2021-03-20T23:39:32Z")
Why do we round cash to two decimal points (i.e. “your total today is $14.32”) instead of three decimal points ($14.325) or one ($14.3) or zero ($14)? Who came up with the idea of nickels and pennies? Why don’t we have half-pennies? Why do we have cents at all? ---
**Author:** ![Richard\_Pearse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/richard_pearse/32/13144_2.png) [@Richard\_Pearse](https://boards.straightdope.com/u/Richard_Pearse)\ **Post date:** [March 20, 2021, 11:46pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/2 "2021-03-20T23:46:50Z")
> [@ekedolphin](#): > > Why don’t we have half-pennies? Why do we have cents at all? We used to have half-pennies. > **[Halfpenny (British pre-decimal coin)](https://en.wikipedia.org/wiki/Halfpenny_(British_pre-decimal_coin))** > > The British pre-decimal halfpenny, (pronounced /ˈheɪpəni/), once abbreviated ob. (from the Latin 'obulus'), was a denomination of sterling coinage worth 1/480 of one pound, 1/24 of one shilling, or 1/2 of one penny. Originally the halfpenny was minted in copper, but after 1860 it was minted in bronze. In the run-up to decimalisation, it ceased to be legal tender from 31 July 1969 (although halfpennies dated 1970 were minted as part of a final pre-decimal commemorative set). The halfpenny fe "Ha... I suspect the rest of it has to do with what was practical and useful at the time the system of coins was invented. Then we kind of end up stuck with the basic numbering system while inflation gradually makes the smaller coins useless and they get taken out of circulation. The five cent piece is the smallest coin in New Zealand these days, but prices are still given to the cent. ---
**Author:** ![Northern\_Piper](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/northern_piper/32/5304_2.png) [@Northern\_Piper](https://boards.straightdope.com/u/Northern_Piper)\ **Post date:** [March 20, 2021, 11:52pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/3 "2021-03-20T23:52:55Z")
I’ve been in a few restaurants where the prices are just given in dollars. ---
**Author:** ![don\_t\_ask](https://avatars.discourse-cdn.com/v4/letter/d/e68b1a/32.png) [@don\_t\_ask](https://boards.straightdope.com/u/don_t_ask)\ **Post date:** [March 20, 2021, 11:59pm UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/4 "2021-03-20T23:59:19Z")
I did a report yesterday and rounded the revenue figure down from $4,376,899,204.55 to $4,376,899,204. ---
**Author:** ![Dr.Winston\_OBoogie](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.winston_oboogie/32/2945_2.png) [@Dr.Winston\_OBoogie](https://boards.straightdope.com/u/Dr.Winston_OBoogie)\ **Post date:** [March 21, 2021, 12:02am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/5 "2021-03-21T00:02:07Z")
There were half penny coins minted in the US. During the depression, many states created “tax tokens” worth 1/10th of a cent. Why round to two decimals? Because that’s what we did for a long, long time with cash, and no one cares enough about 1/10 of a cent or less to bother changing the system. ---
**Author:** ![Limmin](https://avatars.discourse-cdn.com/v4/letter/l/f04885/32.png) [@Limmin](https://boards.straightdope.com/u/Limmin)\ **Post date:** [March 21, 2021, 12:02am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/6 "2021-03-21T00:02:19Z")
I’d say you’re a dollar short! To OP: Over the years, inflation has reduced the buying power of a penny to the level where these days, it’s feeling more and more like we should do away with it. Round everything to the nearest 5 cents. Unfortunately we can’t just jump to rounding to the nearest dime, because of the quarter. But a couple hundred years ago pennies meant something substantial. ---
**Author:** ![burpo\_the\_wonder\_mutt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/burpo_the_wonder_mutt/32/365_2.png) [@burpo\_the\_wonder\_mutt](https://boards.straightdope.com/u/burpo_the_wonder_mutt)\ **Post date:** [March 21, 2021, 12:03am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/7 "2021-03-21T00:03:30Z")
^ And maybe a day late? ---
**Author:** ![Folly](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/folly/32/3219_2.png) [@Folly](https://boards.straightdope.com/u/Folly)\ **Post date:** [March 21, 2021, 12:07am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/8 "2021-03-21T00:07:16Z")
> [@Dr.Winston\_OBoogie](#): > > There were half penny coins minted in the US. A half penny in 1856 (last time they were minted) would be worth about 15 cents today because of inflation. And yet for some reason we are still minting cents, nickels, and dimes. ---
**Author:** ![Velocity](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/velocity/32/18006_2.png) [@Velocity](https://boards.straightdope.com/u/Velocity)\ **Post date:** [March 21, 2021, 12:17am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/9 "2021-03-21T00:17:27Z")
@ OP: Way too much trouble, that’s why. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [March 21, 2021, 12:17am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/10 "2021-03-21T00:17:54Z")
At 55 cents, shouldn’t you have rounded up? ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 21, 2021, 12:20am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/11 "2021-03-21T00:20:54Z")
For what it’s worth, the US actually has five monetary units, not two. There are ten mills in a cent, ten cents in a dime, ten dimes in a dollar, and ten dollars in an eagle. Nobody ever uses them as units, but they’re defined as such. ---
**Author:** ![penultima\_thule](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/penultima_thule/32/3833_2.png) [@penultima\_thule](https://boards.straightdope.com/u/penultima_thule)\ **Post date:** [March 21, 2021, 12:31am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/12 "2021-03-21T00:31:29Z")
There’s no love (or remembrance) of the farthing? > **[Farthing (British coin)](https://en.m.wikipedia.org/wiki/Farthing_(British_coin))** > > Pages for logged out editors learn more > > > > The British farthing (from Old English fēorðing, from fēorða, a fourth) abbreviated qua. (L. quadrans), was a denomination of sterling coinage worth 1/960 of one pound, 1/48 of one shilling, or 1/4 of one penny; initially minted in copper and then in bronze, which replaced the earlier English farthings. Before Decimal Day in 1971, Britain used the Carolingian monetary system, wherein the largest unit was a pound sterling of 20 shillings, each o... ---
**Author:** ![don\_t\_ask](https://avatars.discourse-cdn.com/v4/letter/d/e68b1a/32.png) [@don\_t\_ask](https://boards.straightdope.com/u/don_t_ask)\ **Post date:** [March 21, 2021, 12:34am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/13 "2021-03-21T00:34:05Z")
> [@D\_Anconia](#): > > At 55 cents, shouldn’t you have rounded up? **Limmin** and you are correct. I will have to notify Treasury on Monday. ---
**Author:** ![Folly](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/folly/32/3219_2.png) [@Folly](https://boards.straightdope.com/u/Folly)\ **Post date:** [March 21, 2021, 12:35am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/14 "2021-03-21T00:35:20Z")
> [@Chronos](#): > > Nobody ever uses them as units, but they’re defined as such. Gas stations? ---
**Author:** ![engineer\_comp\_geek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/engineer_comp_geek/32/504_2.png) [@engineer\_comp\_geek](https://boards.straightdope.com/u/engineer_comp_geek)\ **Post date:** [March 21, 2021, 12:35am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/15 "2021-03-21T00:35:21Z")
Originally, when we first became a country, we had Continental Dollars. Continental Dollar Notes (aka Continentals) had values from $1/6 up to $80. By the 1780s, Continentals had devalued to the point of being close to worthless. This led to the coinage act of 1792. After the complete failure of Continentals, they decided to base the value the dollar on something a bit more stable, so they picked the Spanish Silver Dollar, which was widely used at the time. They also created the following coins (according to Wikipedia): Eagles $10.00 Half eagles $5.00 Quarter eagles $2.50 Dollars or Units $1.00 Half dollars $0.50 Quarter dollars $0.25 Disme $0.10 Half disme $0.05 Cents $0.01 Half cents $0.005 So if you want to know who is to blame for the creation of the modern nickels and pennies, it’s the U.S. Congress in 1792. Half cents were last minted in 1857. And in case you are wondering, “disme” comes from old French, and that comes from the Latin Decima, for 1/10th. “Disme” quickly morphed into “dime”. > [@Chronos](#): > > Nobody ever uses them as units Gasoline stations still use mills, just so that they can get that extra 9/10ths of a cent per gallon. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [March 21, 2021, 12:49am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/16 "2021-03-21T00:49:22Z")
Gas stations price in a multiple of mills, but they’re still not really using them as units. Gas isn’t two thousand, nine hundred and ninety-nine mills a gallon; it’s two point nine nine nine dollars. ---
**Author:** ![penultima\_thule](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/penultima_thule/32/3833_2.png) [@penultima\_thule](https://boards.straightdope.com/u/penultima_thule)\ **Post date:** [March 21, 2021, 12:53am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/17 "2021-03-21T00:53:51Z")
> [@don\_t\_ask](#): > > I will have to notify Treasury on Monday. Hopefully your Treasury is more forgiving than my Treasury. Last week one our transport providers (major international player) submitted an invoice for $163,580.00 plus GST (10.0%) of $16,358.01. (sic) Where the $0.01 in violation of mathematics came from I don’t know. Though it isn’t the first time they have done this. But when I submitted the validated invoice for payment without the erroneous 1c our Finance rejected it and demanded the invoice be validated including the 1c overpayment. Whaddaya do? 🤷‍♂️ ---
**Author:** ![Princhester](https://avatars.discourse-cdn.com/v4/letter/p/3e96dc/32.png) [@Princhester](https://boards.straightdope.com/u/Princhester)\ **Post date:** [March 21, 2021, 1:44am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/18 "2021-03-21T01:44:37Z")
Don’t tell me, let me guess. You do thousands of these reports per day and the rounded off cents get whisked into an account where no one misses them. The account is controlled by Mr D. Ask ---
**Author:** ![Napier](https://avatars.discourse-cdn.com/v4/letter/n/ce73a5/32.png) [@Napier](https://boards.straightdope.com/u/Napier)\ **Post date:** [March 21, 2021, 2:17am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/19 "2021-03-21T02:17:42Z")
Looks like pennies have been around since the 1300s at least, while dollars appeared in the 1500s. We don’t round money to two decimal places, it just looks that way. I’d say we (mostly) use integer cents or pennies, but have the custom of a period separator between digit 2 and 3. It’s a question of punctuating the larger aggregates of money, not subdividing the smallest. Gas stations can do whatever they want. They’re part of the petroleum industry, which has all the money in the world. ---
**Author:** ![Banksiaman](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/banksiaman/32/3334_2.png) [@Banksiaman](https://boards.straightdope.com/u/Banksiaman)\ **Post date:** [March 21, 2021, 2:20am UTC](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328/20 "2021-03-21T02:20:12Z")
Electronic payment now means that $ 25.04 is as meaningful and retrievable an amount as $25.00 with no more effort. While it originated to represent the cent as a commodity unit, the relationship of coins to items of value was subsequently eroded by inflation, and as others have noted has meant that in many countries the smaller small change has gone extinct. If we did not go to electronic payment but relied on coinage, then I suspect you’d have seen a transition to maybe single digit or rounded dollar amounts in time. [Next page](https://boards.straightdope.com/t/why-do-we-round-cash-to-two-decimal-points/938328.md?page=2)