Suppose you own a house and are considering installing insulation at a cost of $1,000. The insulation will save you $100 annually in heating costs. In addition, the insulation will increase the resale value of the house by $800. Further, suppose that you plan to sell your house 5 years after the insulation is installed and that if you do not purchase the insulation, the money needed to buy it would remain in a bank paying 4% interest annually. Finally, assume that the dollar figures and the interest rate appearing above are all measured in real terms and the annual rate of inflation is 2 percent. Should you invest in the insulation?