Abstract:

In this paper, we solve an asset flow differential equations (AFDEs) system, which plays an important role in financial modeling and market dynamics, using an improved differential transform method (DTM). The improved method combines the conventional DTM with Adomian polynomials to enhance the accuracy and efficiency of solving complex nonlinear systems of equations. This hybrid approach overcomes some of the limitations found in traditional numerical methods when dealing with AFDEs. It is faster than numerical methods, easy to compute, and highly accurate. The solution obtained from this method can be expressed as a convergent infinite series, providing a semi-analytical representation of the system's behavior.