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Definition: algorithm

A set of ordered steps for solving a problem, such as a mathematical formula or the instructions in a program. The terms algorithm and "program logic" both refer to a series of steps to solve a problem. However, an algorithm implies the use of math and/or complex logic rather than just the if-then-else sequences in business software. See encryption algorithm and program logic.

From "Al Khwarizmi"
The word algorithm comes from the mathematician al-Khwarizmi, who documented the Hindu-Arabic numbering system around the year 780. Al-Khwarizmi's name was Latinized to "algoritmi," and from there the word "algorithm" evolved.