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Chapter 1

Introduction

What is numerical methods?

Numerical analysis involves the study of methods of computing numerical data. In many

problems this implies producing a sequence of approximations by repeating the procedure again

and again. People who employ numerical methods for solving problems have to worry about the

following issues: the rate of convergence (how long does it take for the method to find the

answer), the accuracy (or even validity) of the answer, and the completeness of the response (do

other solutions, in addition to the one found, exist). Numerical methods provide approximations

to the problems in question. No matter how accurate they are they do not, in most cases, provide

the exact answer. In some instances working out the exact answer by a different approach may

not be possible or may be too time consuming and it is in these cases where numerical methods

are most often used.

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Some application of numerical methods

1. Advanced numerical methods are essential in making numerical weather prediction feasible.

2. Computing the trajectory of a spacecraft requires the accurate numerical solution of a system

of ordinary differential equations.

3. Car companies can improve the crash safety of their vehicles by using computer simulations of

car crashes. Such simulations essentially consist of solving partial differential

equations numerically.

4. Hedge funds (private investment funds) use tools from all fields of numerical analysis to attempt

to calculate the value of stocks and derivatives more precisely than other market participants.

5. Airlines use sophisticated optimization algorithms to decide ticket prices, airplane and crew

assignments and fuel needs. Historically, such algorithms were developed within the

overlapping field of operations research.

6. Insurance companies use numerical programs for actuarial analysis.

Error
In numerical analysis, the solutions that we
computed are not exact (just an approximation).
This introduced errors.

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The error in a computed quantity is defined as:

= −
= −
= −

−
=

,
= × 100%

,
"
−
=
× 100%

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Truncation error
• The error made by truncating an infinite sum and
approximating it by a finite sum. For instance, if we
approximate the sine function by the first two non-
zero term of its Taylor series, resulting error is a
truncation error, because it is caused by truncation
of the infinite Taylor series to form the algorithm.
• Often, truncation error also includes discretization
error, which is the error that arises from taking a
finite number of steps in a computation to
approximate an infinite process.

Round-off error
• A round-off error, also called rounding error, is the
difference between the calculated approximation of a
number and its exact mathematical value due
to rounding. One of the goals of numerical analysis is
to estimate errors in calculations, including round-off
error, when using approximation equations and/or
algorithms, especially when using finitely many digits
to represent real numbers (which in theory have
infinitely many digits).
• When a sequence of calculations subject to rounding
error is made, errors may accumulate, sometimes
dominating the calculation. In ill-conditioned problems,
significant error may accumulate.