Problem #5 (20 pts) s bought an old house to use as his business office. He found that the ceiling was poorly insulated and that the heat loss could be cut significantly if six inches of foam insulation war installed. He estimated that with the insulation, he could cut the heating bill by $150 per month and the air-conditioning cost by $110 per month. Assuming that he uses the AC only from May to September and the heater on peptember and the heater only from December to February. If he decides to install the insulation, it will be done at the beginning of May. James's interest rate is 12% compounded quarterly How much can James spend on insulation if he expects to keep the property for ten years A = 150 pr month - Need P savings por month total = 260 in A-110 pr wooh Al Shanths e llo 4= 3 months @ 1so. 124 1 = 0.0406 = 4.06% N- (10) (12) = 120 1 110 1 no 1 to 1 10 1 11 1 150 156 1 lso p=904,6661 B 10 10/(1.0400) 1 2 20,040 10415 L - ulfz p = 150 / (1.0406) | p=130 L 0.6404 (1.0466) p - 415.79 + 16.040e) S. 1) - 596.51 0.410