Free lesson · Differential equations
Start with a rate rule and an initial value
Open interactive lessonPractice calculationsExplore labs
Start with the idea
- A differential equation gives a rate of change.
- An initial value supplies the starting level.
Symbols, units & horizon
- y(t): amount at time t in units
- t: elapsed hours
- c: fixed rate in units/hour
- y₀: starting amount in units
- dy/dt: rate of change of y with time
When and why to use this
Use rate equations to model inventory, balances or physical systems over time. Proportional growth and mean reversion build on this example.
- Read as “y increases by 2 units per hour.”
- Use to specify the starting value.
- After one hour: 7. After two hours: 9.
- A solution gives the value at every allowed time.
- Check a solution by differentiating it and checking its starting value.
Core rule · definition and worked arithmetic
Start with a rate rule and an initial value
- Constant accumulation over time t is .
- Add the initial amount: .
- Differentiate: the constant term contributes 0 and ct contributes c.
- At t=0 the formula returns y₀, satisfying the initial condition.
Work it by hand
With c=2 and y₀=5, y(3)=5+2×3=11. With the same rate but y₀=8, the answer becomes 14.
Use the rule
- Name the inputs and units.
- Work the small example by hand.
- Check the result before continuing to the next lesson.
Before moving on
Explain the core rule in one sentence, reproduce the worked calculation and solve both practice variations.
Research sources, review dates and limitations
Python implementation
Self-contained teaching example. Python 3.10+; dependencies and input conventions are shown in the code and notation. Run in your own Python environment.
def constant_rate_path(initial, rate, elapsed):
return initial+rate*elapsed
print(constant_rate_path(5,2,3))Continue learning
Differential Equations & Numerical Models — all lessons- Start with a rate rule and an initial value
- Ordinary differential equations: growth and mean reversion
- Euler stepping, convergence and stability
- Partial differential equations and the bridge to current research
Quantitative finance and development glossary · Python resources and libraries · Research sources and limitations