One plus one equals two, right? How about .2 plus 1.4 times 10? That equals 16, right? Not if you're doing the math with PHP (or most other programming languages):
echo floor((0.2 + 1.4) * 10); // Should be 16. But it's 15!
This is due to how floating point numbers are handled internally. They are represented with a fixed number of decimal places and can result in numbers that do not add up quite like you expect. Internally our .2 plus 1.4 times 10 example computes to roughly 15.9999999998 or so. This kind of math is fine when working with numbers that do not have to be precise like percentages. But when working with money precision matters as a penny or a dollar missing here or there adds up quickly and no one likes being on the short end of any missing money.
The BC Math Solution
Fortunately PHP offers the BC Math extension which is "for arbitrary precision mathematics PHP offers the Binary Calculator which supports numbers of any size and precision, represented as strings." In other words, you can do precise math with monetary values using this extension. The BC Math extension contains Functions that allow you to perform the most common operations with precision including addition, subtraction, multiplication, and division.
A Better Example
Here's the same example as above but using the bcadd() function to do the math for us. It takes three parameters. The first two are the values we wish to add and the third is the number of decimal places we wish to be precise to. Since we're working with money we'll set the precision to be two decimal palces.
echo floor(bcadd('0.2', '1.4', 2) * 10); // It's 16 like we would expect it to be.
Conclusion
Using the BC Math extension is easy and allows us to precisely handle money transaction without rounding errors or any inaccuracies. Always use it when handling monetray transactions in your PHP application. If you're not using PHP, you may want to consider using the appropriate library for your programming language.
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John Conde is a certified Authorize.Net developer
