The Finite Difference Method (FDM) is a numerical technique used to approximate solutions to differential equations. It works by replacing continuous derivatives with discrete differences, allowing for the analysis of complex problems in fields like engineering, physics, and finance. In FDM, a grid is created over the domain of interest, and the values of the function at these grid points are calculated. By using Taylor series expansions, the method estimates the behavior of the function at these points, making it easier to solve equations that describe dynamic systems, such as heat conduction or fluid flow.