Solving Simultaneous Equations Using Matrix Using Excel
Solving Simultaneous Equations Using Matrix Using Excel
There are occasions in solving Finance problems when we face a situation that requires solving several equations at one time, whether that isa portfolio optimization, an analysis of economic systems, or making decisions under bond indenture constraints.
When solving simultaneous equations, we can use these functions to solve for the unknown values. For example, if you are faced with the following system of equations: a + 2b + 3c = 1 a c = 0 2a + b = 1.25 Using matrix Algebra, [ ] [ ] [ ]
To solve for the vector [ ], we bring the first matrix over to the right-hand side by dividing both sides by the matrix, and then multiply the two matrices: [ ] [ ][ ]
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This produces: