The modern word algorithm is derived from Abu Ja'far Muhammad ibn Musa al-Khwarizmi, one of the better known Persian mathematicians, mostly thanks to his book, Hisab al-jabr w'al-muqabala.
al-jabr, which means "completion" or "transposition", was later mangled into algebra, for al-Khwarizmi's book was the first we know was written on the subject. In al-Khwarizmi's time, algebra was a practical system for solving all kinds of problems "in cases of inheritance, legacies, partition, lawsuits, and trade, and in all their dealings with one another, or where the measuring of lands, the digging of canals, geometrical computations, and other objects of various sorts and kinds are concerned."
al-jabr was about removing the negative terms from an equation, while al-muqabala meant "balancing" the values of an equation across an equals sign. Like this:
50 + 3x + x2 = 29 + 10x
which can be simplified to just:
21 + x2 = 7x
(Zap the 3x on the left-side by subtracting it from 10x on the right, then zap the 29 on the right-side by subtracting it from 50 on the left.)
More on al-Khwarizmi and al-jabr is available at MacTutor online and Wikipedia.
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