To approximate is to calculate the value of something based on informed knowledge. A computer program can approximate the value of a house based on square footage, number of rooms, year built, and other relevant factors.
As a verb, approximate means "to estimate." Unlike the word guess, approximate implies the use of a logical or mathematical method. You might guess how tall a friend is based on the first number that comes to mind, but you could approximate his height by using your own height as a comparison. As an adjective, approximate can mean "near" or "close together." If your friend calls to say he’s at a location approximate to your house, she’s in your neighborhood.