In statistics and applied mathematics , the Bayes’ theorem also referred to as the Bayes’ rule may be a mathematical formula wont to determine the contingent probability of events. Essentially, the Bayes’ theorem describes the probability of an occasion supported prior knowledge of the conditions which may be relevant to the event.
The theorem is known as after english statistician, Bayes , who discovered the formula in 1763. it’s considered the inspiration of the special statistical inference approach called the Bayes’ inference.
Besides statistics, the Bayes’ theorem is additionally utilized in various disciplines, with medicine and pharmacology because the most notable examples. additionally , the theory is usually employed in several fields of finance. a number of the applications include but aren’t limited to, modeling the danger of lending money to borrowers or forecasting the probability of the success of an investment.