You own a house, on which you pay a mortgage. Currently you owe 260,000 dollars

Question

You own a house, on which you pay a mortgage. Currently you owe 260,000 dollars on your mortgage, and your interest rate is 3.3 percent (this means that every year you pay interest on your debt amounting to 3.3 percent of what you owe). Your mortgage requires you to pay 2100 dollars every month. A. How much money do you pay to your mortgage company every year (in dollars)? B. Let Q(t) denote the amount of money you owe after t years. Assuming that the payments and interest all take place continuously, write down a differential equation satisfied by Q(t). Q = C. You might decide that it is easier to measure the amount you owe in thousands of dollars, rather than just in dollars. So let R(t) denote the amount you owe after t years, measured in thousands of dollars. What differential equation is satisfied by R(t)? R =

Explanation / Answer

(A) Mortgage payment every year = $2,100 * 12 = $25,200

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