Since #1# pound of potatoes equals #$0.98#, #3.8# pounds would equal #0.98*3.8#. That would equal #3.724#, but since money only goes to two decimal points (the cents), we round to the nearest hundredth.
Since #4# is closer to #2# than #3#, we don't round up to #$3.73#, we round down to #$3.72#.