diff --git a/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/index.jsx b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/index.jsx
index e63433a79..2137c090b 100644
--- a/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/index.jsx
+++ b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/index.jsx
@@ -13,6 +13,7 @@ import ResetCard from './settingsComponents/ResetCard';
 import MatlabCard from './settingsComponents/MatlabCard';
 import TimerCard from './settingsComponents/TimerCard';
 import TypeCard from './settingsComponents/TypeCard';
+import ToleranceCard from './settingsComponents/Tolerance';
 import GroupFeedbackCard from './settingsComponents/GroupFeedback/index';
 import SwitchToAdvancedEditorCard from './settingsComponents/SwitchToAdvancedEditorCard';
 import messages from './messages';
@@ -65,6 +66,16 @@ export const SettingsWidget = ({
           updateAnswer={updateAnswer}
         />
       </div>
+      {ProblemTypeKeys.NUMERIC === problemType
+          && (
+          <div className="my-3">
+            <ToleranceCard
+              updateSettings={updateSettings}
+              answers={answers}
+              tolerance={settings.tolerance}
+            />
+          </div>
+          )}
       <div className="my-3">
         <ScoringCard scoring={settings.scoring} updateSettings={updateSettings} />
       </div>
diff --git a/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/constants.js b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/constants.js
new file mode 100644
index 000000000..16d408045
--- /dev/null
+++ b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/constants.js
@@ -0,0 +1,18 @@
+/* eslint-disable import/prefer-default-export */
+import messages from './messages';
+
+export const ToleranceTypes = {
+  percent: {
+    type: 'Percent',
+    message: messages.typesPercentage,
+  },
+  number: {
+    type: 'Number',
+    message: messages.typesNumber,
+
+  },
+  none: {
+    type: 'None',
+    message: messages.typesNone,
+  },
+};
diff --git a/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/index.jsx b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/index.jsx
new file mode 100644
index 000000000..bda7efd3d
--- /dev/null
+++ b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/index.jsx
@@ -0,0 +1,125 @@
+import React, { useEffect } from 'react';
+import { injectIntl, FormattedMessage, intlShape } from '@edx/frontend-platform/i18n';
+import { Alert, Form } from '@edx/paragon';
+import PropTypes from 'prop-types';
+import SettingsOption from '../../SettingsOption';
+import messages from './messages';
+import { ToleranceTypes } from './constants';
+
+// eslint-disable-next-line no-unused-vars
+export const isAnswerRangeSet = ({ answers }) =>
+  // TODO: for TNL 10258
+  // eslint-disable-next-line implicit-arrow-linebreak
+  false;
+
+export const handleToleranceTypeChange = ({ updateSettings, tolerance, answers }) => (event) => {
+  if (!isAnswerRangeSet(answers)) {
+    let value;
+    if (event.target.value === ToleranceTypes.none.type) {
+      value = null;
+    } else {
+      value = tolerance.value || 0;
+    }
+    const newTolerance = { type: ToleranceTypes[Object.keys(ToleranceTypes)[event.target.selectedIndex]].type, value };
+    updateSettings({ tolerance: newTolerance });
+  }
+};
+
+export const handleToleranceValueChange = ({ updateSettings, tolerance, answers }) => (event) => {
+  if (!isAnswerRangeSet(answers)) {
+    const newTolerance = { value: event.target.value, type: tolerance.type };
+    updateSettings({ tolerance: newTolerance });
+  }
+};
+
+export const getSummary = ({ tolerance, intl }) => {
+  switch (tolerance?.type) {
+    case ToleranceTypes.percent.type:
+      return `± ${tolerance.value}%`;
+    case ToleranceTypes.number.type:
+      return `± ${tolerance.value}`;
+    case ToleranceTypes.none.type:
+      return intl.formatMessage(messages.noneToleranceSummary);
+    default:
+      return intl.formatMessage(messages.noneToleranceSummary);
+  }
+};
+
+export const ToleranceCard = ({
+  tolerance,
+  answers,
+  updateSettings,
+  // inject
+  intl,
+}) => {
+  const canEdit = isAnswerRangeSet({ answers });
+  let summary = getSummary({ tolerance, intl });
+  useEffect(() => { summary = getSummary({ tolerance, intl }); }, [tolerance]);
+  return (
+    <SettingsOption
+      title={intl.formatMessage(messages.toleranceSettingTitle)}
+      summary={summary}
+      none={tolerance.type === ToleranceTypes.none.type}
+    >
+      { canEdit
+       && (
+       <Alert
+         varaint="info"
+       >
+         <FormattedMessage {...messages.toleranceAnswerRangeWarning} />
+       </Alert>
+       )}
+      <div className="halfSpacedMessage">
+        <span>
+          <FormattedMessage {...messages.toleranceSettingText} />
+        </span>
+      </div>
+      <Form.Group className="pb-0 mb-0">
+        <Form.Control
+          as="select"
+          onChange={handleToleranceTypeChange({ updateSettings, tolerance, answers })}
+          disabled={canEdit}
+          value={tolerance.type}
+        >
+          {Object.keys(ToleranceTypes).map((toleranceType) => (
+            <option
+              key={toleranceType.type}
+              value={toleranceType.type}
+            >
+              {intl.formatMessage(ToleranceTypes[toleranceType].message)}
+            </option>
+          ))}
+        </Form.Control>
+        { tolerance?.type !== ToleranceTypes.none.type && !canEdit
+          && (
+          <Form.Control
+            className="mt-4"
+            type="number"
+            value={tolerance.value}
+            onChange={handleToleranceValueChange({ updateSettings, tolerance, answers })}
+            floatingLabel={intl.formatMessage(messages.toleranceValueInputLabel)}
+          />
+          )}
+      </Form.Group>
+
+    </SettingsOption>
+  );
+};
+
+ToleranceCard.propTypes = {
+  tolerance: PropTypes.shape({
+    type: PropTypes.string,
+    value: PropTypes.oneOfType([PropTypes.number, PropTypes.any]),
+  }).isRequired,
+  answers: PropTypes.arrayOf(PropTypes.shape({
+    correct: PropTypes.bool,
+    id: PropTypes.string,
+    selectedFeedback: PropTypes.string,
+    title: PropTypes.string,
+    unselectedFeedback: PropTypes.string,
+  })).isRequired,
+  updateSettings: PropTypes.func.isRequired,
+  intl: intlShape.isRequired,
+};
+
+export default injectIntl(ToleranceCard);
diff --git a/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/index.test.jsx b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/index.test.jsx
new file mode 100644
index 000000000..e5d47f4af
--- /dev/null
+++ b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/index.test.jsx
@@ -0,0 +1,116 @@
+import {
+  render, screen, fireEvent,
+} from '@testing-library/react';
+import React from 'react';
+import { ToleranceTypes } from './constants';
+import { ToleranceCard } from './index';
+import { formatMessage } from '../../../../../../../../testUtils';
+
+jest.mock('@edx/frontend-platform/i18n', () => ({
+  __esmodule: true,
+  ...jest.requireActual('@edx/frontend-platform/i18n'),
+  FormattedMessage: jest.fn(({ defaultMessage }) => (
+    <div>{ defaultMessage }</div>
+  )),
+}));
+
+jest.mock('../../SettingsOption', () => ({ children, summary }) => (
+  <div className="SettingsOption" data-testid="Settings-Option">{summary}{children}</div>
+));
+
+jest.mock('@edx/paragon', () => ({
+  Alert: jest.fn(({ children }) => (
+    <div className="PGN-Alert">{children}</div>)),
+  Form: {
+    Control: jest.fn(({
+      children, onChange, as, value,
+    }) => {
+      if (as === 'select') {
+        return (<select className="PGN-Form-Control" data-testid="select" onChange={onChange}>{children}</select>);
+      }
+      return (<input type="number" data-testid="input" onChange={onChange} value={value} />);
+    }),
+    Group: jest.fn(({ children }) => (<div className="PGN-Form-Group">{children}</div>)),
+  },
+}));
+
+describe('ToleranceCard', () => {
+  const mockToleranceNull = {
+    type: ToleranceTypes.none.type,
+    value: null,
+  };
+  const mockTolerancePercent = {
+    type: ToleranceTypes.percent.type,
+    value: 0,
+  };
+  const mockToleranceNumber = {
+    type: ToleranceTypes.number.type,
+    value: 0,
+  };
+
+  const props = {
+    answers: [], // TODO: for TNL 10258
+    updateSettings: jest.fn(),
+    intl: {
+      formatMessage,
+    },
+  };
+  beforeEach(() => {
+    jest.clearAllMocks();
+  });
+  describe('summary', () => {
+    it('Renders None', async () => {
+      render(<ToleranceCard tolerance={mockToleranceNull} {...props} />);
+      const NoneText = screen.getAllByText(ToleranceTypes.none.type);
+      expect(NoneText).toBeDefined();
+    });
+    it('Render Percent Value', () => {
+      render(<ToleranceCard tolerance={mockTolerancePercent} {...props} />);
+      const PercentText = screen.getByText(`± ${mockTolerancePercent.value}%`);
+      expect(PercentText).toBeDefined();
+    });
+    it('Renders Number Value', () => {
+      render(<ToleranceCard tolerance={mockToleranceNumber} {...props} />);
+      const NumberText = screen.getByText(`± ${mockToleranceNumber.value}`);
+      expect(NumberText).toBeDefined();
+    });
+  });
+  describe('Type Select', () => {
+    it('Renders the types for selection', async () => {
+      const { container } = render(<ToleranceCard tolerance={mockToleranceNull} {...props} />);
+      const options = container.querySelectorAll('option');
+      expect(options.length).toBe(3);
+      Object.keys(ToleranceTypes).forEach(type => {
+        expect(screen.getAllByText(ToleranceTypes[type].message.defaultMessage)).toBeDefined();
+      });
+    });
+    it('Calls updateSettings on selection of an option', async () => {
+      const { container, getByTestId } = render(<ToleranceCard tolerance={mockToleranceNull} {...props} />);
+      const select = getByTestId('select');
+      fireEvent.change(select, { target: { value: ToleranceTypes.number.type } });
+      const options = container.querySelectorAll('option');
+      expect(options[0].selected).toBeFalsy();
+      expect(options[1].selected).toBeTruthy();
+      expect(options[2].selected).toBeFalsy();
+      expect(props.updateSettings).toHaveBeenCalledWith({ tolerance: { type: ToleranceTypes.number.type, value: 0 } });
+      fireEvent.change(select, { target: { value: ToleranceTypes.none.type } });
+      expect(props.updateSettings).toHaveBeenCalledWith({ tolerance: { type: ToleranceTypes.none.type, value: null } });
+    });
+  });
+  describe('Value Select', () => {
+    it('Doesnt render if type is null', async () => {
+      const { queryByTestId } = render(<ToleranceCard tolerance={mockToleranceNull} {...props} />);
+      expect(queryByTestId('input')).toBeFalsy();
+    });
+    it('Renders with intial value of tolerance', async () => {
+      const { queryByTestId } = render(<ToleranceCard tolerance={mockToleranceNumber} {...props} />);
+      expect(queryByTestId('input')).toBeTruthy();
+      expect(screen.getByDisplayValue('0')).toBeTruthy();
+    });
+    it('Calls change function on change.', () => {
+      const { queryByTestId } = render(<ToleranceCard tolerance={mockToleranceNumber} {...props} />);
+      fireEvent.change(queryByTestId('input'), { target: { value: 52 } });
+      expect(props.updateSettings).toHaveBeenCalledWith({ tolerance: { type: ToleranceTypes.number.type, value: '52' } });
+    });
+  });
+});
diff --git a/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/messages.js b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/messages.js
new file mode 100644
index 000000000..b31c0c6d7
--- /dev/null
+++ b/src/editors/containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/messages.js
@@ -0,0 +1,46 @@
+const messages = {
+  toleranceSettingTitle: {
+    id: 'problemEditor.settings.tolerance.title',
+    defaultMessage: 'Tolerance',
+    description: 'Title for tolerance setting menu',
+  },
+  noneToleranceSummary: {
+    id: 'problemEditor.settings.tolerance.summary.none',
+    defaultMessage: 'None',
+    description: 'message provided when no tolerance is set for a problem',
+  },
+  toleranceSettingText: {
+    id: 'problemEditor.settings.tolerance.description.text',
+    defaultMessage: 'The margin of error on either side of an answer.',
+    description: 'Description of the features of setting a tolerance for a problem',
+  },
+  toleranceValueInputLabel: {
+    id: 'problemEditor.settings.tolerance.valueinput',
+    defaultMessage: 'Tolerance',
+    description: 'floating label for input to set the value of the tolerance',
+  },
+  toleranceAnswerRangeWarning: {
+    id: 'problemEditor.settings.tolerance.answerrangewarning',
+    defaultMessage: 'Tolerance cannot be applied to an answer range',
+    description: 'a warning to users that tolerance cannot be aplied to an answer range.',
+  },
+  typesPercentage: {
+    id: 'problemEditor.settings.tolerance.type.percent',
+    defaultMessage: 'Percentage',
+    description: 'A possible value type for a tolerance',
+
+  },
+  typesNumber: {
+    id: 'problemEditor.settings.tolerance.type.number',
+    defaultMessage: 'Number',
+    description: 'A possible value type for a tolerance',
+
+  },
+  typesNone: {
+    id: 'problemEditor.settings.tolerance.type.none',
+    defaultMessage: 'None',
+    description: 'A possible value type for a tolerance',
+  },
+
+};
+export default messages;
diff --git a/src/editors/containers/ProblemEditor/data/OLXParser.js b/src/editors/containers/ProblemEditor/data/OLXParser.js
index 94756a475..b5467b838 100644
--- a/src/editors/containers/ProblemEditor/data/OLXParser.js
+++ b/src/editors/containers/ProblemEditor/data/OLXParser.js
@@ -462,6 +462,16 @@ export class OLXParser {
     }
     const { answers } = answersObject;
     const settings = { hints };
+    if (ProblemTypeKeys.NUMERIC === problemType && _.has(answers[0], 'tolerance')) {
+      const toleranceValue = answers[0].tolerance;
+      if (!toleranceValue || toleranceValue.length === 0) {
+        settings.tolerance = { value: null, type: 'None' };
+      } else if (toleranceValue.includes('%')) {
+        settings.tolerance = { value: parseInt(toleranceValue.slice(0, -1)), type: 'Percent' };
+      } else {
+        settings.tolerance = { value: parseInt(toleranceValue), type: 'Number' };
+      }
+    }
     if (solutionExplanation) { settings.solutionExplanation = solutionExplanation; }
 
     return {
diff --git a/src/editors/containers/ProblemEditor/data/ReactStateOLXParser.js b/src/editors/containers/ProblemEditor/data/ReactStateOLXParser.js
index ea63ed5c7..795f23199 100644
--- a/src/editors/containers/ProblemEditor/data/ReactStateOLXParser.js
+++ b/src/editors/containers/ProblemEditor/data/ReactStateOLXParser.js
@@ -1,6 +1,7 @@
 import _ from 'lodash-es';
 import { XMLParser, XMLBuilder } from 'fast-xml-parser';
 import { ProblemTypeKeys } from '../../../data/constants/problem';
+import { ToleranceTypes } from '../components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/constants';
 
 class ReactStateOLXParser {
   constructor(problemState) {
@@ -306,6 +307,7 @@ class ReactStateOLXParser {
 
   buildNumericalResponse() {
     const { answers } = this.problemState;
+    const { tolerance } = this.problemState.settings;
     const { selectedFeedback } = this.editorObject;
     let answerObject = {};
     const additionalAnswers = [];
@@ -316,11 +318,11 @@ class ReactStateOLXParser {
         if (answer.correct && !firstCorrectAnswerParsed) {
           firstCorrectAnswerParsed = true;
           let responseParam = {};
-          if (_.has(answer, 'tolerance')) {
+          if (tolerance?.value) {
             responseParam = {
               responseparam: {
                 '@_type': 'tolerance',
-                '@_default': _.get(answer, 'tolerance', 0),
+                '@_default': `${tolerance.value}${tolerance.type === ToleranceTypes.number.type ? '' : '%'}`,
               },
             };
           }
diff --git a/src/editors/data/redux/problem/reducers.js b/src/editors/data/redux/problem/reducers.js
index 6e7628ea5..6d5f36704 100644
--- a/src/editors/data/redux/problem/reducers.js
+++ b/src/editors/data/redux/problem/reducers.js
@@ -3,6 +3,7 @@ import { createSlice } from '@reduxjs/toolkit';
 import { indexToLetterMap } from '../../../containers/ProblemEditor/data/OLXParser';
 import { StrictDict } from '../../../utils';
 import { ProblemTypeKeys, ShowAnswerTypesKeys } from '../../constants/problem';
+import { ToleranceTypes } from '../../../containers/ProblemEditor/components/EditProblemView/SettingsWidget/settingsComponents/Tolerance/constants';
 
 const nextAlphaId = (lastId) => String.fromCharCode(lastId.charCodeAt(0) + 1);
 const initialState = {
@@ -32,6 +33,10 @@ const initialState = {
     },
     showResetButton: false,
     solutionExplanation: '',
+    tolerance: {
+      value: null,
+      type: ToleranceTypes.none.type,
+    },
   },
 };