Anita Plass-Tuwurk, who owns an engineering consulting firm, bought an old house to use as her business

office. She found that the ceiling was poorly insulated and that the heat loss could be cut significantly if 6 inches

of foam insulation were installed. She estimated that with the insulation she could cut the heating bill by $40 per

month and the air conditioning cost by $25 per month.

Assuming that the summer season is 3 months (June,

July, August) of the year and the winter season is another 3 months (December, January, and February) of the

year, how much can she spend on insulation if she expects to keep the property for 5 years? Assume that

neither heating nor air conditioning would be required during the fall and spring seasons. She is making this

decision in April, about whether to install the insulation in May. If the insulation is installed, it will be paid for at

the end of May. Anitas interest rate is 9%, compounded monthly