**A decimal is rounded to the nearest cent by rounding it to the nearest hundredth of a dollar, which is a cent.** Because there are 100 cents in a United States dollar, rounding to the nearest cent would require finding the nearest hundredth.

For example, the decimal 3.763 when rounded to the nearest cent is 3.76. This is because the decimal can only be rounded to the last cent, not the last fraction of a cent. In a dollar, there are only a hundred cents, so any decimal must be rounded to the most accurate hundredth.

Another example could start with the decimal 0.7445. To find the nearest cent, someone would start with the number in the last decimal place, which is five. Five, unlike four and lower numbers, must be rounded up. This changes the number in the next decimal place up to a five. So the decimal is now .745. The same rounding method happens to the five in the thousandth place.