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When a number is 0, 1, 2, 3 or 4 it rounds down. When a number is 5, 6, 7, 8 or 9 it rounds up. In the case of 4.385 the thousandths digit is a 5 so you round up. The answer is 4.39.

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4.39

Q: What is the nearest hundredth to 4.385?

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