To answer the question, we need to compare the assets and liabilities of the Chang family from 2007 to 2008.
Assets in 2007:
1. Home: [tex]$315,000
2. Car: $[/tex]10,000
3. Savings: [tex]$2,000
Total assets for 2007:
\[ \text{Assets}_{2007} = \$[/tex]315,000 + \[tex]$10,000 + \$[/tex]2,000 = \[tex]$327,000 \]
Liabilities in 2007:
1. Mortgage: $[/tex]265,000
2. Car Loan: [tex]$5,000
Total liabilities for 2007:
\[ \text{Liabilities}_{2007} = \$[/tex]265,000 + \[tex]$5,000 = \$[/tex]270,000 \]
Assets in 2008:
1. Home: [tex]$325,000
2. Car: $[/tex]6,000
3. Credit Card Debt (which should be subtracted from the assets because it's a debt): -[tex]$1,500
Total assets for 2008:
\[ \text{Assets}_{2008} = \$[/tex]325,000 + \[tex]$6,000 - \$[/tex]1,500 = \[tex]$329,500 \]
Liabilities in 2008:
1. Mortgage: $[/tex]240,000
2. Car Loan: [tex]$1,000
Total liabilities for 2008:
\[ \text{Liabilities}_{2008} = \$[/tex]240,000 + \[tex]$1,000 = \$[/tex]241,000 \]
Now, let's compare the total assets and liabilities between the two years:
Assets Comparison:
[tex]\[ \text{Assets}_{2008} = \$329,500 \][/tex]
[tex]\[ \text{Assets}_{2007} = \$327,000 \][/tex]
[tex]\[ \text{Assets}_{2008} > \text{Assets}_{2007} \][/tex]
Liabilities Comparison:
[tex]\[ \text{Liabilities}_{2008} = \$241,000 \][/tex]
[tex]\[ \text{Liabilities}_{2007} = \$270,000 \][/tex]
[tex]\[ \text{Liabilities}_{2008} < \text{Liabilities}_{2007} \][/tex]
From these comparisons, we can determine:
- Assets increased from 2007 to 2008.
- Liabilities decreased from 2007 to 2008.
Therefore, the correct answer is:
d. From 2007 to 2008, assets increased and liabilities decreased.
