use the rigid foam sheating. face reflective side into
attic space. caulk sheathing to top & bottom
of wall, tape seams. use button cap nails to
attach form sheathing.

this will add insulation value to wall, reflect
heat out of kneewall back into the attic space
and air seal the kneewall.

be careful working in the attic, precut your
foam sheating on the ground & carry into
attic to work.

best of luck

Thanks energy rater. This is where I get confused though. So the reflective foiled face should be facing me as I am nailing it, or into the wall??, because I want to keep the bathroom warm and keep the heat in. Also where do I find the button cap nails? I am going to use 2 inch rigid foam. I looked on line and HD or Lowes you have to order them.

home depot/lowes any hardware store sells button cap nails.
you could also use roofing nails...button caps have plastic
cap...roofing nails have large heads. you just want to use
a nail that won't sink into the foam board.

foil faces into attic space. as you nail the foam board
the foil is looking at you.

the foil acts as a radiant barrier, and as such will
reflect radiant heat out of wall & back into attic.
doesn't work to reflect heat back into the wall/house.

this is why radiant barriers are hot climate installs
with little savings in cooling climates.
rb's require a minimum of a 3/4" air space to work.
putting insulation in the stud bay next to foil would
keep rb from performing.

heat will stay in bathroom with insulation..both batt
& foam board. foam board will add more R-value and
air seal the wall. this will keep heat in bathroom.

whats you location?
I never see 2" foam sheathing
in my area. you could use 2 sheets of 1" sheathing.
even blue or pink board would work. the foil isn't
a deal breaker IMO if you aren't in a hot climate.

best of luck.

How cold has the garage been since the bathroom remodel? There is no harm in adding more insulation to the wall facing the garage but I would not expect to see much of temperature difference in the bathroom.

Is there a heat vent in the bathroom? This may be more a supply problem then lack of insulation.

Thank you both for your replies. I am in Michigan. John Manville makes a 2 inch foiled faced rigid foam board.
I am concerned about the warmth being/staying in the bathroom not the garage. So perhaps because of my climate I could just use plain 2 inch XPS. But I was told to use the foil faced because it is fire proof.
Mike and energy rater the garage temperature is the same. I wanted to use the foam board to reflect back and keep the bathroom warmer. The insulation company told me to place the foil face into the wall, that way any heat in the bathroom will reflect back into the bathroom. Boy this is so confusing to me. There is a heat vent in the bathroom under the vanity. I realize what you are saying about the supply problem in the bathroom, thank you for that. Interesting that I wouldn't see a difference in temperature in the bathroom with putting foam board on the garage side of the wall. I just had blown in cellulose in the attic and that is what the insulation guys told me,...to add the foam board to the garage wall that shares with it the bathroom wall.

The other issue I have is the bathroom fan. The insulation company added the cellulose up to R49 and air sealed the attic...it is warmer on my second floor. BUT here is my question...The bathroom fan a new Panasonic when I first turn it on there is a whoosh of cold air that first comes out of it. I realize that there could be cold air sitting there at first on the attic side. BUT I felt it last night with the fan turned ON and there is a bit of cold air that circulates at the top of the fan. I stuck a tissue up there and it definitely sucks the air out of the room but it is weird. Needless to say it is it is chilly in the bathroom when taking a shower until the bathroom heats up from the steam of warm water from the shower. . Does anyone have any thoughts on that?? The duct from the bathroom fan is vented out to the roof and is an insulated duct. The only thought I may have is that it is not properly air sealed on the attic side. Any thoughts or ideas are most greatly appreciated. I am a new homeowner and am new at learning all of this. Your patience is most greatly appreciated.

I assume the wall you are trying to insulate already has R-13 batt insulation. I think adding 2 inches of foam is not going to make a noticeable difference in the bathroom temperature. Home Depot has a 2 inch foam Tuff-R foam board that is rated for R-13. It is a little expensive but might be worth it.

It is my understanding the reflective foil will help deflect radiant heat. This heat is in the form of infrared energy. I don't see how putting the foil against the exterior sheet rock is going to reflect heat back into the bathroom.

The fan should have a flap to stop the cold air. What might be happening is when the fan first turns on the flap opens and the cold air trapped in the vent falls into the bathroom. The insulated duct does not keep air warm. The purpose of the insulation is to keep the warm air from condensing when the bathroom is warm on a cold day. Does the vent on the roof have a flap? That would help cold air from blowing down into the bathroom when the fan is not is use.

Does this bathroom have a window? Does it have a double pan and a tight seal? I would spend money improving the window before adding insulation to the garage wall.

Hey thanks Mike for helping me. Yes the wall does already have fiberglass batts in it. I did see the Tuff-R at Home Depot. The fan does have a flap. I do think you are absolutely correct about the cold air that is trapped falls into the bathroom. The vent on the roof does have a flap. No there is no window in the bathroom. What is strange though, is I have another bathroom on the same floor, but when you turn it on you don't feel the trapped cold air drop into the room. It is the same Panasonic fan, with a flap and the same type of roof vent. They are both separately vented. The duct is also insulated. Thanks again for your help, it is a weird situation. I did not have this happen with the master bath fan until the contractor moved the vent/fan to accommodate the new layout of the master bath. But the insulation guys stated it was still connected properly to the vent. I think I am going to ask them to make sure they did air seal the master bath fan.