Assume two values, $A = 4 \pm 0.5$ and $B = 10 \pm 1$. When calculating $AB$, we must convert them into their percentage uncertainties.
$A = \frac{0.5}{4}\times 100 = 4\pm12.5\%$
$B = \frac{1}{10}\times 100 = 10\pm 10\%$
$AB = (4\times10)\pm(12.5\% + 10\%) = 40 \pm22.5\%$
Converting back into absolute uncertainties: $a\Delta (AB) = \frac{22.5}{100}\times 40$ = 9
Hence, $AB = 40 \pm 9 $
However, I find that this method doesn't account for the extremes possible. The largest possible value indicated by the initial uncertainty is $4.5\times 11 = 49.5$, whereas my calculated uncertainty suggests that $49$ is the largest possible number.
Is this the way it is, or am I doing something wrong?