MATLAB can solve differential equations, but the type of solution—analytical or numerical—determines its effectiveness. The discussion highlights that while MATLAB is primarily designed for numerical computations, it does have a symbolic math toolbox that can provide analytical solutions. An example given is the general solution to the differential equation xy' - 4y = (x^6)(e^x), which can be solved analytically. However, for more complex symbolic manipulations, software like Mathematica or Maple may be more suitable. The MATLAB toolbox can yield analytical solutions, as indicated by resources from MathWorks, although access to verify specific capabilities may be limited for some users.