Real Life Application of Math in Economics and Finance

From business to personal needs you use math in Economics and Finance and its is being used daily. Some of the applications of math in Economics and Finance are:

In Stock Market

Investors use many mathematical tools to create good portfolios that make huge profits. This helps investor to save time in making decision in peak market hours and minimize the risk of buying or sharing the share. Financial institutions also uses complex math to automate trading. These algorithms analyze the market and identify patterns in no time.

In Blockchain

The future of transactions is blockchain which is a distributed ledger technology that uses complex maths for encryption which is highly secure. The maths is also used for transactions of cryptocurrency such as checking if the sender have enough crypto to send it to receiver.

In Modeling

Most businesses use complex mathematics models to check for profits. These models also includes data of interest rates and inflation thus making a very accurate model that can be referred for the real profits amount of the company when all the possible expenses are removed.

In Machine Learning

Many businesses uses financial information to teach the machine and check for possible profits, issues and other required changes in the business model. Due to large amount of users data that a company has it can teach the machine to be high accurate in guessing the users likes, dislikes and possible business opportunity.

In Tax Calculations

Individuals and companies can use basic maths to calculate the tax amount and possible tax deductions. It also helps them calculate for possible tax reductions and take into consideration before filling the tax form. Some maths formulas help then calculate best tax and investment decisions to reduce the tax or maximize the tax returns.

Application of Mathematics in Economics and Finance: Mathematics is a core part of Economics and Finance, many concepts such as algebra, profit and loss, discounts, statistics, probability, etc. are used for Economics and Finance.

Math is highly dependent for decision making, analyzing growth or downfall, calculation of profits and loss and many other usages.

In this article, we will learn about the application of math in economy and finance along with suitable examples.