Step 1: Use Approximation Formula
For small \( x \), \( \tan^{-1} (1 + x) \approx \frac{\pi}{4} + x \).
Step 2: Apply Given Values
\[ \tan^{-1} (1.002) \approx \frac{\pi}{4} + 0.002. \] \[ = \frac{3.1416}{4} + 0.002. \] \[ = 0.7854 + 0.002 = 0.7874. \]