Topic > Analysis of Linear Algebra in the Financial World

As time passes, the value and prices of the product will change according to the company and the financial situation at the time. People will have the opportunity to purchase the same products at different prices in different periods of time due to the changing situation of society. To enable people to purchase products at a fair price and at the same time earn profits, companies will need to consider the impact on the prices of products influenced by society. In Linear Algebra in the Financial World, Barbara Swart (2001) uses the example of the determination of the price of gold and the change in price over different periods of time to tell the relationship between linear algebra and the financial world. Between 1999 and 2000, there is a Y2K bug with computers and many other electronic items due to the early setting of the computer program. People set the year with only two digits in the computer program, because by changing the year from 1999 to 2000, the digit will change from "99" to "00" which may cause confusion in data storage and may change from "1999 " returns to "1900" or "19100" (see [1]). Since this could have a big influence on the society, the price of gold could also experience a big change. Therefore in the article Swart gave the example of gold price changes between 1999 and 2000 due to Y2K fear and millennium fever. The use of financial concepts and linear algebra tells readers how the price can change over that period of time. The difference between the increase or decrease in the price of gold per $1 will cause a huge difference in profit after 2000. So the company must determine a price of gold that is fair to both customers and the agency. Swart uses the… center of paper… example of the price of gold to determine the relationships between linear algebra and the financial world. The uses of financial concepts and mathematical equations generally support the author's goal of making the price vary over different time periods. As a mathematical research article, it clearly uses symbols and equations to support the author's point of view showing the result of the completed market item and price changes. However, it is not easy for people who do not have mathematical knowledge to understand the concepts and equations of mathematics. It will be easier for them to read and understand the author's explanation if there are more explanations of the equations or more explanations of the terms. Overall, the relationship between linear algebra and the financial world was clearly explained to Barbara Swart.