Schrödinger’s equation says that the equation models matter not as a particle but as a wave and describes how such a wave propagates. Schrödinger’s equation is fundamental to quantum mechanics, which together with general relativity constitute today’s most effective theories of the physical universe. It led us to a radical revision of physics at very small scales, in which every object has a ‘wave function’ that describes a probability cloud of possible states. At this level, the world is inherently uncertain. Attempts to relate the microscopic quantum world to our macroscopic classical world led to philosophical issues that still reverberate. But experimentally, the quantum theory works beautifully, and today’s computer chips and lasers wouldn’t work without it.
Black-Scholes equation says how the price of financial derivative changes over time, based on the principle that when the price is correct.