Estimate when an approximate answer is sufficient to make the business decision, especially when the inputs themselves are rough or the alternatives are far apart.

Use precise calculation when thresholds are close, when the exact magnitude matters, or when the interviewer has provided exact inputs that clearly support a clean calculation.

State the approximation when it matters. That makes the choice look deliberate rather than careless. If useful, this guide on case interview mental math gives more detail.

estimate when answer only needs direction.