When writing a business letter, what is the rule for spelling out numbers and using just the numeral?

According to the APA Publication Manual, you should use words to express any number that begins a sentence, title, or text heading. (Whenever possible, reword the sentence to avoid beginning with a number.)

For example:

Ten participants answered the questionnaire.

Forty-eight percent of the sample showed an increase; 2% showed no change.

Four patients improved, and 4 patients did not improve.

Remember, in business everything you write can be considered a contract. It is best practice to use numbers and words when describing values. This leaves nothing to error when engaged in price or performance. The APA is a good reference for publishing.

For a little more detail, the AP Style book is helpful. Here's my summary of AP's rules:

General: Spell out whole numbers one through eleven.

Main Exception: Numbers at the beginning of a sentence are always spelled out. Sometimes it's easier to just rewrite the sentence. One exception to this rule is a calendar year. Example: 2009 was a good year.

The following are ALWAYS figures:

Ages
Measurements and dimensions
Monetary units
Million, billion
Percentages

Another rule I follow is that if a number is in the body of the letter (not the start of a sentence) I write out single digit numbers, and use numerals for larger numbers. It's less awkward than, for example, writing out "Two hundred and seventy two thousand four hundred dollars" to write "$273,400." Our brains do not process large numbers that are written out very well.

And another option is to do both:

"As we discussed, the overall cost for completing the new hospital wing will be One million, two hundred thousand dollars ($1.2 million)."