Cervantes, Hannah Yuri M.

BSTM11D
Mathematics in Modern World
Mr. Dexter Rivera
September 24, 2023

Relation of Mathematics in Technology and Finance/Business

Mathematics is the science of structure, order, and relationship that arose

from primitive activities of counting, measuring, and describing object forms. It pertains with logical
thinking and quantitative computation, and its evolution has included an increasing degree of idealization
and abstraction of its subject matter. Mathematics has been an essential component of the physical
sciences and technology since the 17th century, and it has recently taken on a comparable role in the
quantitative components of the biological sciences (Knorr & Gray, 2019). Have you ever thought about
the uses of mathematics in technology and finance?

Several calculating machines with rotating wheels were presented in the 17th century.
Wilhelm Schickard (1592-1635) was perhaps the first to suggest such a machine, followed by Blaise
Pascal (1623-1662) and Gottfried Wilhelm Leibniz (1646-1716). Nevertheless, due to technological
issues, these machines remained a rarity with little practical application. Mechanical calculators were only
commercially produced and widely used in the second part of the 19th century (Swade 2011, 2018). The
English mathematician Charles Babbage (1791-1871) conducted the first major attempts at automated
calculations. In the early 1820s, he developed the difference engine, and in 1834, he developed the
programmable analytical engine. The analytical machine would be controlled by instructions on punched
cards, which we now call programs. Neither of these devices was finished during his lifetime, but they
paved the path for future advancements. Electronic computers have had a significant impact on
mathematics, as will be addressed more below. They have inspired new methods of thinking about key
ideas in mathematics, such as proof, computation, and mathematical knowledge, in addition to giving
previously inconceivable capability for computing—in Ada Lovelace's broad meaning of computation.
Moreover, as in Computer-based information technology has transformed communication amongst
researchers in various areas. Mathematicians may now collaborate in new ways because to instant
electronic communication. For instance, the concept of "massively collaborative mathematics" (Gowers
and Nielsen 2009) has been introduced in open forums to which anybody can contribute.

Online stock trading is permitted. Every day, a million individuals use the portals to
improve their trading comprehension and knowledge to get profitable outcomes. Stockbrokers make
measured judgments because of arithmetic in this sophisticated technology. Assume there is no use of
mathematics for this analysis, computation, and decision making. In such circumstances, the field
becomes a game of chance. Because of the advancement of current technology and equipment, stock
market participants must rely on their knowledge and abilities to achieve the required earnings. The most
recent tools are all the consequence of current technology, which has made these calculations and
estimations easier to do. In addition, communication technology has grown in favor among the general
public. We might not have had the possibility to interact with people in other geographic regions if it
hadn't been for current technology. Mathematics fuels cyberculture. While there has been less discussion
on this topic, there is significant evidence and grounds to support the claim. Modern tech tools were
developed, adjusted, and continue to see new additions and changes in the way we interact as a result of
the use of mathematics (Jones, 2021). Phillip Wilson (2018) represents the other position, arguing that the
existence of successful applications of mathematics in technology and elsewhere teaches us something
about the nature of mathematics. Platonism, logicism, formalism, and intuitionism are the four prominent
traditions in mathematical philosophy. They've largely been discussed in terms of pure mathematics. We
are able to gain new insights into their ontological and epistemological implications by studying them
through the perspective of distinct mathematical applications. (Hansson, 2020)

Louis Bachelier was the first to bring applied mathematics to the forefront of
financial analysis. In his dissertation, he applied advanced financial mathematics to the theory of
speculation (1900). Bachelier appears to have been among the first to examine continuous-time stochastic
processes, particularly Brownian motion and its applications to option-pricing. Option trading is becoming
a massive financial activity, and some "exotica" options in recent times contributed to the GFC. Bachelier
also developed the solution to a specific diffusion equation some five years before Einstein, demonstrating
the breadth and depth of his mathematical knowledge; the diffusion equations changed physics and
chemistry learning forever, as did option pricing, but only after the work done much later by Black and
Scholes. Bachelier's contributions to finance were not recognized until the mid-1950s. Until now, it
appears that the most complex mathematics in finance has been basic discounting to determine present
values of future cash flows (Tularam, 2013)

As we further discuss the use of mathematics in finance and business, it is a section

of mathematics that involves data analysis, problem solving, and financial market modeling. It is
beneficial in a variety of businesses and professions, and there are several possible applications in
financial mathematics, such as: economics, statistics, and probability. Risk management is one use of
mathematics in finance. This method is useful for professionals in identifying and managing financial
risks. Financial analysts frequently apply mathematics to evaluate market data, find trends in data, and
anticipate potential hazards. Additionally, data mining is the act of detecting patterns and anomalies in
data to produce predictions. Data mining has several applications, including risk management, cost
reduction, and more. Data mining may be used by professionals in a range of industries, including
insurance, manufacturing, finance, technology, and retail (Krosel, 2023).

In conclusion, there is substantial literature on the connections between technology

and science, but not much on the relation between technology and mathematics. Nonetheless, they are
connected in a variety of ways. Without mathematics, technology would be impractical. Because
mathematics requires technology in some way, the relationship is mutual. Mathematicians now utilize
computers not only for computations, but also for a variety of other jobs, such as searching for proofs,
validations, and counterexamples Moreover, the relation of finance in mathematics has no controversy and
it revolutionized mathematics research and education. It would be impossible to locate mathematics
faculties throughout the world that are not pursuing research in finance and economics. Furthermore,
almost all new algebra and calculus textbooks now incorporate examples of financial applications. The
embedded nature of mathematics in finance and the application of mathematical ideas has impacted
finance research and teaching (as it should), but finance has also affected mathematics research and
education significantly.

References:

Esser, F., & Vignaharta, R. (2017b). Comparative Research Methods. The International Encyclopedia of

Communication Research Methods, 1(2), 1–22.

https://doi.org/10.1002/9781118901731.iecrm0035
Hansson, S. O. (2020). Technology and mathematics. Philosophy & Technology, 33.

https://doi.org/10.1007/s13347-019-00348-9

Jones, P. (2021, July 14). How Math Increased Modern Technology Development. ITech Post.

https://www.itechpost.com/articles/106335/20210714/how-math-increased-modern-technology-

development.htm

Krosel, A. (2022, February 3). Financial Mathematics: Definition and Real-World Applications. Indeed

Career Guide. https://www.indeed.com/career-advice/career-development/financial-mathematics

Tularam, G. (2013). Mathematics in finance and economics: importance of teaching higher order

mathematical thinking skills in finance. Journal of Business Education & Scholarship of Teaching,

7(1), 43–73. https://files.eric.ed.gov/fulltext/EJ1167343.pdf