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System Modeling with BOTH Differential and Algebraic Equations

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Hello everyone,
I am trying to model an Inverter based microgrid in MATLAB which has several sub components with BOTH differential and algebraic equations. I have attached a block diagram with this post.
Does anyone know the best way to do this? Are there any examples out there with both differential equations and algebraic equations? I tried doing a google search and didn't find anything.
1) I could solve the differential equations for a particular time instant, feed those values to the algebraic equations, and simply loop for the duration for the simulation. See the block diagram for the Power and Current Controllers.
2) I could discretize the differential equations and do the same kind of thing as #1.
Please let me know your thoughts.

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