# The Monte Carlo method

IBM 1620 became a veritable Klondyke to many researchers at Uppsala University. With its use, researchers could suddenly deal with previously posed problems which could not before be solved in a reasonable amount of time. In addition, it turned out the same methods could often be used within several different disciplines.

A good example of this is the research conducted by physician Ingvar Lundgren (eventually Professor of Physics at Chalmers University of Technology) in Uppsala. He studied wave functions in an atomic beam apparatus and used, among others, the so-called Monte Carlo-method for his computerized calculations. Eventually he applied the same method to do agricultural economic calculations in collaboration with the Swedish University of Agricultural Sciences. It is still used today to calculate the development of share prices, for instance.

The principle of the Monte Carlo method is to use a random number to search for maxima and minima for functions with several variables. In its simplest form, each variable is given a random value, within certain limits. Then the value of the function is calculated for the particular case. The process is done repeatedly, and the best obtained result is the solution.

If the solution doesn’t comply with the restrictions of the system, the solution is discarded.