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

Binary Option
A type of option in which the payoff is structured to be either ... 
Boolean Algebra
A division of mathematics which deals with operations on logical ... 
Fibonacci Numbers/Lines
Leonardo Fibonacci was an Italian mathematician born in the 12th ... 
Binomial Tree
A graphical representation of possible intrinsic values that ... 
Yield On Earning Assets
A financial solvency ratio that compares a financial institution’s ... 
Sharpe Ratio
A ratio developed by Nobel laureate William F. Sharpe to measure ...

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 >> 
What is the difference between a simple random sample and a stratified random sample?
Simple random samples and stratified random samples differ in how the sample is drawn from the overall population of data. ... Read Full Answer >> 
What are the advantages and disadvantages of using systematic sampling?
As a statistical sampling method, systematic sampling is simpler and more straightforward than random sampling. It can also ... Read Full Answer >> 
What is the difference between the standard error of means and standard deviation?
The standard deviation, or SD, measures the amount of variability or dispersion for a subject set of data from the mean, ... Read Full Answer >> 
What is the theory of asymmetric information in economics?
The theory of asymmetric information was developed in the 1970s and 1980s as a plausible explanation for common phenomena ... Read Full Answer >> 
How does market risk differ from specific risk?
Market risk and specific risk are two different forms of risk that affect assets. All investment assets can be separated ... Read Full Answer >>

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. 
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. 
Professionals
Quants: The Rocket Scientists Of Wall Street
Blend math, finance and computer skills to command a high  and well deserved  salary. 
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. 
Economics
What Is Supply?
Supply is the amount of goods a producer is willing to produce at a given price, and is one of the most basic concepts in economics. 
Economics
Modified Internal Rate of Return (MIRR)
Modified internal rate of return (MIRR) is a variant of the more traditional internal rate of return calculation. 
Fundamental Analysis
What is Quantitative Analysis?
Quantitative analysis refers to the use of mathematical computations to analyze markets and investments. 
Fundamental Analysis
Understanding the Simple Random Sample
A simple random sample is a subset of a statistical population in which each member of the subset has an equal probability of being chosen. 
Economics
What is Systematic Sampling?
Systematic sampling is similar to random sampling, but it uses a pattern for the selection of the sample. 
Fundamental Analysis
Explaining Expected Return
The expected return is a tool used to determine whether or not an investment has a positive or negative average net outcome.