Alteryx Foundation Micro-Credential Practice Exam

Which datatype would you select for decimal precision in financial calculations?

1. Float

2. Double

3. Decimal

4. Int32

The correct answer is: Decimal

Selecting the Decimal datatype for financial calculations is essential due to its ability to represent decimal numbers with exact precision. In financial applications, rounding errors can significantly affect calculations, especially when dealing with currency, where precision in representation is crucial. The Decimal datatype can store a fixed number of decimal places and ensures that operations on these values are performed accurately, without the floating-point inaccuracies often associated with other datatypes. While Float and Double are commonly used for numbers with decimal points, they can introduce rounding errors because they represent numbers in binary format, which may not be able to accurately represent some decimal fractions. Int32 is a whole number format and, therefore, unsuitable for any financial calculation requiring decimal precision. Using the Decimal datatype mitigates these issues, making it the optimal choice for precise financial calculations.