In this video, you'll learn about Bayes' theorem. Named after 18th-century British mathematician Thomas Bayes, Bayes' theorem is a mathematical formula used to determine conditional probability. Bayes' theorem, also known as Bayes' rule, allows you to update or revise predicted probabilities of an event by incorporating new information. The formula for Bayes' therorem is often used in finance to calculate the risk of lending money to borrowers. Watch this video for more examples of Bayes' theorem.