Algebraic Method

AAA

DEFINITION of 'Algebraic Method'

A mathematical means of solving a pair of linear equations. Algebraic method refers to a method of solving an equation involving two or more variables where one of the variables is expressed as a function of one of the other variables. There are typically two algebraic methods used in solving these types of equations: the substitution method and the elimination method.

INVESTOPEDIA EXPLAINS 'Algebraic Method'

One algebraic method is the substitution method. In this case, the value of one variable is expressed in terms of another variable and then substituted in the equation. In the other algebraic method – the elimination method – the equation is solved in terms of one unknown variable after the other variable has been eliminated by adding or subtracting the equations. For example, to solve:


8x + 6y = 16


-8x – 4y = -8


Using the elimination method, one would add the two equations as follows:


8x + 6y = 16


-8x – 4y = -8


2y = 8


y = 4


The variable "x" has been eliminated. Once the value for y is known, it is possible to solve for x by substituting the value for y in either equation:


8x + 6y = 16


8x + 6(4) = 16


8x + 24 = 16


8x + 24 – 24 = 16 – 24


8x = -8


X = - 1

RELATED TERMS
  1. Binary Option

    A type of option in which the payoff is structured to be either ...
  2. Boolean Algebra

    A division of mathematics which deals with operations on logical ...
  3. Fibonacci Numbers/Lines

    Leonardo Fibonacci was an Italian mathematician born in the 12th ...
  4. Binomial Tree

    A graphical representation of possible intrinsic values that ...
  5. Endowment Effect

    The endowment effect describes a circumstance in which an individual ...
  6. Self-enhancement

    The self-enhancing bias is the tendency for individuals take ...
RELATED FAQS
  1. What is the chaos theory?

    The chaos theory is a complicated and disputed mathematical theory that seeks to explain the effect of seemingly insignificant ... Read Full Answer >>
Related Articles
  1. Home & Auto

    Insure Your Future With A Career As An Actuary

    If you've got excellent math skills, they can add up to a lucrative career as an actuary.
  2. Investing Basics

    Calculating Beta: Portfolio Math For The Average Investor

    Beta is a useful tool for calculating risk, but the formulas provided online aren't specific to you. Learn how to make your own.
  3. Professionals

    Quants: The Rocket Scientists Of Wall Street

    Blend math, finance and computer skills to command a high - and well deserved - salary.
  4. Personal Finance

    Financial Physics: "Natural" Market Laws

    Physics uses math to define the laws of the universe; here, we look at what laws explain the financial universe.
  5. Investing

    How to Use Stratified Random Sampling

    Stratified random sampling is a technique best used with a sample population easily broken into distinct subgroups. Samples are then taken from each subgroup based on the ratio of the subgroup’s ...
  6. Economics

    How A Limited Government Affects A Country's Finances

    Countries with limited governments have fewer laws about what individuals and businesses can and can’t do. What's the net result?
  7. Fundamental Analysis

    Lognormal and Normal Distribution

    When and why do you use lognormal distribution or normal distribution for analyzing securities? Lognormal for stocks, normal for portfolio returns.
  8. Investing Basics

    How Does Goodwill Affect Financial Statements?

    Goodwill is a bit of a paradox--intangible, yet it is recorded as an asset on the purchasing company's balance sheet.
  9. Investing Basics

    Using Normal Distribution Formula To Optimize Your Portfolio

    Normal or bell curve distribution can be used in portfolio theory to help portfolio managers maximize return and minimize risk.
  10. Technical Indicators

    The Normal Distribution Table, Explained

    The normal distribution formula is based on two simple parameters - mean and standard deviation

You May Also Like

Hot Definitions
  1. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  2. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  3. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  4. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  5. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  6. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
Trading Center