A store manager is analyzing daily amounts for transactions from multiple points of sale in a database. The amounts include fractional values that require precise calculations. Which data type meets these needs for storing monetary amounts?
A specialized monetary data type that handles fractional values
A floating-point data type that applies binary arithmetic
A text data type that stores amounts as characters
An integer data type that discards fractional parts
A currency-specific data type is designed for financial transactions. It preserves decimal precision to prevent rounding issues. Floating-point approaches can introduce inaccuracies because of how binary fractions work. Integer types are not suitable for amounts with fractional components, and text types complicate numeric analysis and validation.
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Why is a specialized monetary data type better than a floating-point data type for financial calculations?
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How does binary arithmetic in floating-point types lead to inaccuracies?