I encounter with one of the textbook problem that I don't know how to approach.(adsbygoogle = window.adsbygoogle || []).push({});

Here's the queston:

A home buyer can afford to spend no more than $800/month on mortage payments. Suppose that the interest rate is 9% and that the term of the mortgage is 20 years. Assume that interest is compounded continuously and that payments are also made continuously.

a) Determine the maximum amount that this buyer can afford to borrow.

b) Determine the total interest paid during the term of the mortage.

Right now I have no idea on how to setup this problem, so I hope I can get some pointers here.

Thank you very much!

Leo

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# Homework Help: Interest rate, Differential Eq problem.

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