Construct a differential equation for the changing mortgage balance. (Equation Must include r, A, P, and dA/dt) Relevant information: monthly mortgage payment (M) is composed of taxes and insurance (TI), and principle and interest (P). So, M=TI + P (TI goes into escrow account). Mortgage rate, r, is APR divided monthly (0.05/12). t is time in months, A(t) is the mortgage balance after t months of payments. the rate of change of A(t) is the difference between interest incurred and P (the portion of the monthly payment that does not go into Escrow account).

Construct a differential equation for the changing mortgage balance. (Equation Must include r, A, P, and dA/dt) Relevant information: monthly mortgage payment (M) is composed of taxes and insurance (TI), and principle and interest (P). So, M=TI + P (TI goes into escrow account). Mortgage rate, r, is APR divided monthly (0.05/12). t is time in months, A(t) is the mortgage balance after t months of payments. the rate of change of A(t) is the difference between interest incurred and P (the portion of the monthly payment that does not go into Escrow account).

Personal Finance

13th Edition

ISBN:9781337669214

Author:GARMAN

Publisher:GARMAN

Chapter9: Obtaining Affordable Housing

Section9.4: Financing A Home

Problem 1CC

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