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This submit is a part of a sequence sponsored by Outdated Republic Surety.

Should you’re confused in regards to the letter designations that stand for hundreds and thousands and thousands, you’re not alone. And it’s not your fault. In reality, it’s one among our most continuously requested questions. Right here’s why you’re confused and what to do about it.

The place Does the mm Abbreviation Come From?

Western civilization has had two highly effective influences — the traditions of the Greeks and the Romans, and there’s typically battle. The Greeks would seek advice from the god of the ocean as Poseidon, whereas the Romans would name him Neptune. For the Romans, the god of wine could be Bacchus, and for the Greeks, it will be Dionysus. These variations carry themselves into many elements of our tradition, together with monetary evaluation.

As a younger banker within the mid-80s, I discovered what had been taught for a lot of many years earlier than, that we abbreviate hundreds in our evaluation with the letter M. If we needed to indicate thousands and thousands, we might present that as MM. For this, we must always credit score the Romans. M is the Roman numeral for thousand and MM is supposed to convey one thousand-thousand — or million. To take it additional; one billion could be proven as $1MMM or one-thousand million.

Nonetheless, reality be recognized, if there have been an historic Roman right here and we requested him to interpret our use of Roman numerals, we might discover that technically MM means two thousand and MMM means three thousand, so there are flaws on this custom. This jogs my memory of the outdated joke about an historic Roman that goes right into a bar, holds up two fingers in a peace signal to the bartender, and says, “5 beers, please.”

Ok Is Meant To Stand For Thousand Isn’t It?

Wait a minute, you say. I do know I’ve seen jobs posted that pay $50K, and Ok is supposed to face in for a thousand. And you’d be appropriate, due to the Greeks. Ok comes from the Greek phrase kilo which implies a thousand. The Greeks would likewise present million as M, brief for Mega. So if we keep in line with the Greek abbreviations, then billion could be proven as a letter G (Giga). Consider your pc expressing bytes of reminiscence as kilobyte, megabyte, or gigabyte. Nonetheless, in the case of billion, we don’t actually see G or MMM because the abbreviation for billion. We usually tend to see a headline that reads the federal government spent $60B on a brand new venture. They’re utilizing B for billion. What can I say? B for billion isn’t Greek or Roman; it’s simply the primary letter of the phrase billion. A lot for consistency.

I noticed a headline lately in The Each day Journal of Commerce that learn the brand new downtown submit workplace was to be constructed for $89M. On the planet of accounting and monetary evaluation, that reads $89 thousand {dollars}, however we all know from context that the headline author meant $89 million {dollars}. We generally should code-switch and use context to find out what the creator is telling us. I referenced the 2021 Related Press Stylebook utilized by the vast majority of journalists to see if the information would weigh in on the right way to abbreviate thousand or million. When writing, the information advises, to make use of figures just for something lower than 1,000,000, however spell out “million,” “billion,” and ‘trillion” for numbers of 1 million or higher, equivalent to 2.4 billion. Moreover, the Related Press recommends abbreviating thousands and thousands as “M” and billions as “B” in headlines.

Brokers may also generally see us talk M as hundreds once we quote surety bond charges or agent commissions. For instance, the usual Class B price begins at $25/M for the primary $100M; then $15/M for the subsequent $400M; then $10/M for the subsequent $2MM. These charges are expressed per thousand and the MM denotes thousands and thousands. Likewise, we might quote you a single and mixture contractor line of authority. That line could also be expressed, as an illustration, as $5MM single and $15MM mixture. In case you are an agent or a contractor, you will have seen an e-mail out of your surety underwriter that claims one thing like, “The client ought to improve their financial institution line to $1MM.” You now know that years of custom have skilled us to indicate a million {dollars} this manner.

Whereas the fields of accounting, banking, and finance have adopted the Roman custom, different fields equivalent to pc programming and the high-tech trade have adopted Greek-influenced abbreviations. As we combine our traditions, it generally turns into tough to know what somebody intends to convey expressing hundreds or thousands and thousands in an abbreviation. It’s an imperfect world.

Nonetheless Have Questions? We’re Right here To Assist?

At Outdated Republic Surety we search to ship transparency and readability in our communications. Should you see an abbreviation that’s complicated or unclear, please attain out to your native underwriter or department for clarification, even if you’re simply asking for a good friend. If you want to be taught extra about Outdated Republic Surety and a few of our providers like Business Surety Bonds, and Contract Bonds, or simply need extra info, don’t hesitate to contact us at the moment.

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