Parallel algorithms are designed to solve problems by utilizing multiple processors simultaneously, leading to decreased execution time when more processors are involved. They are particularly effective in scenarios such as solving large systems of equations, matrix multiplication, and file copying, where tasks can be divided into independent operations. For instance, in matrix multiplication, each multiplication can occur concurrently, and results can be combined afterward. Applications extend to modern computing environments, including GPU processing and multi-threaded operations, where tasks like reading and writing files can be optimized through overlapping I/O operations. While parallel algorithms can enhance performance, especially in embarrassingly parallel situations, they may not always yield benefits on single CPU machines due to context switching and thread management overhead. However, even single CPU systems can leverage parallelism for I/O operations and other specific tasks. Overall, the discussion highlights the importance and versatility of parallel algorithms in improving computational efficiency across various applications.