This answer has been generated with ChatGPT. In this case I agree with ChatGPT. I would add that in a real-world situation, I would first discuss with the developer if the behaviour is as they intended, check if there is some documentation on the issue and, if necessary, discuss with the analyst if a documentation change is necessary. I would then make sure there is an automated test to verify that the issue (if it is an issue) does not return in future releases.
- There is a service that rounds amounts to two decimal digits.
- The service calculates GST.
- The service rounded up 1.255 to 1.25.
Is 1.25 the correct result? Why?
According to New Zealand's GST rounding regulations, when calculating GST inclusive amounts, rounding should occur on the final total and not at an intermediate step of calculation. The general rounding rule is to round to the nearest cent, rounding up if the amount is exactly halfway.
The number 1.255 should be correctly rounded to 1.26 and not 1.25. This is because standard rounding rules state that if the digit following the last digit to be retained is 5, the last digit retained should be rounded up. Therefore, rounding 1.255 should result in 1.26.
In the case of New Zealand GST calculations, the rounding rule specifies rounding down if the digit immediately after the decimal point is less than 5, and rounding up if it is 5 or more. Thus, rounding 1.255 to 1.25 is incorrect based on the correct application of the rounding rule.
For more detailed guidelines, you can refer to the official New Zealand Inland Revenue website, which provides specific instructions on handling rounding for GST calculations.